Luxury Life vs. Unpaid Workers: A Startup Scandal

A woman in a private jet using a tablet while seated elegantly

FBI investigators are pursuing criminal charges against a startup founder who allegedly used $13 million in venture capital funding to finance her lavish lifestyle, including a Caribbean wedding and luxury home, while employees went unpaid for weeks.

Story Highlights

Shiloh Luckey faces SEC civil charges and FBI criminal investigation for securities and bank fraud at ComplYant startup
Allegedly misused over $13 million in VC funding for personal expenses including house purchase, Caribbean wedding, and luxury trips
Company shut down abruptly in 2024, leaving over 50 employees unpaid for seven weeks with missing 401(k) contributions
SEC alleges Luckey falsified revenue metrics, claiming growth to $250,000 monthly when actual average was around $250
Case represents broader regulatory crackdown on startup fraud following high-profile scandals like Theranos and FTX

Federal Investigation Targets Startup Fraud

Shiloh Luckey, founder of Los Angeles-based tax-compliance startup ComplYant, faces dual federal investigations for allegedly defrauding investors of millions. The FBI and U.S. Attorney’s Office notified Luckey in April 2025 of criminal securities and bank fraud charges, while the SEC filed civil complaints in October 2025. Luckey allegedly diverted $2.2 million from the company’s $5.5 million seed round to fund personal luxuries including Super Bowl tickets, trips to Aspen, Miami Beach, Turks and Caicos, and Lisbon.

Inflated Revenue Metrics Deceived Investors

SEC allegations reveal Luckey systematically falsified ComplYant’s financial performance to attract venture capital funding. She claimed monthly revenue growth from $2,500 to $250,000, but actual figures averaged around $250 with fewer than four new subscribers monthly. The company’s peak monthly revenue never exceeded $620, despite presentations to investors suggesting exponential growth. This deception enabled Luckey to secure funding from Craft Ventures, co-founded by current White House advisor David Sacks, in 2022.

The pattern of fraudulent metrics represents a classic “fake it till you make it” approach that regulators increasingly target. SEC Regional Director Monique Winkler emphasized that “founders cannot fake it until they make it by falsifying revenue.” Luckey also falsely claimed CPA credentials to bolster credibility with potential investors, adding another layer of deception to her fundraising efforts.

Employee Exploitation and Corporate Abandonment

ComplYant’s abrupt shutdown in 2024 left over 50 employees in financial distress, highlighting the human cost of startup fraud. Luckey severed contact with staff members, delaying final paychecks for seven weeks and causing missing 401(k) contributions that remain unresolved. This abandonment of fiduciary responsibility to employees represents a disturbing trend where founders prioritize personal enrichment over basic obligations to their workforce.

The FBI is investigating a startup founder accused of using VC money to pay for her house and a Caribbean wedding https://t.co/AnYWhEvtdt

— Insider Tech (@TechInsider) December 16, 2025

Despite facing federal charges, Luckey launched a new startup called HabitLoop in October 2025, marketing it as a “digital financial assistant.” She continues posting tax and accounting advice on TikTok to her 24,000 subscribers, demonstrating remarkable audacity given the pending criminal investigation. When contacted by reporters, Luckey declined comment, stating “I don’t have anything to offer you.”