PledgeMusic Could Face a Criminal Investigation Over Crowdfunding Fraud

PledgeMusic Cofounder Benji Rogers: Is 'I'm Sorry' Enough?

PledgeMusic Cofounder Benji Rogers: Is ‘I’m Sorry’ Enough?

Several days ago, and confirming a report first leaked on Digital Music News, PledgeMusic announced that it would be entering bankruptcy.

In a ‘heartfelt’ letter, co-founder Benji Rogers admitted the embattled British crowdfunding platform stole used artists’ money to pay off debts, a fact the company refused to disclose to fans and musicians.

He wrote (emphasis mine),

I cannot begin to appreciate how all of you affected artists are feeling about this and I am deeply sorry for what you have been through….

The company will go into administration at some point this week or early next which means that any funds received for the assets of Pledge will be distributed to all of the creditors involved.  This will include all of the artists who are owed money.

PledgeMusic operated as a platform meant to channel fan contributions directly to artists.  However, the company’s poor mismanagement – basically, outright theft – of fans’ hard-earned cash led PledgeMusic to hoard artist’s money to keep its sinking operation afloat.

Now, as musicians express their frustration over the bankruptcy, the music industry has targeted Rogers and his executive team.

How long have Rogers and PledgeMusic stolen artists’ cash?

Earlier this year, after speaking with Rogers and his team, the British Musicians Union urged indie artists to use a better, more established platform.

Hinting at legal action down the line, the organization wrote,

The MU has been aware for some time that musicians who have launched campaigns on the crowdfunding platform, PledgeMusic, are owed outstanding monies.  We have today met with [the company] and they have assured us that the outstanding payments will be brought up to date within the next 90 days.

This is far from satisfactory, but at this time we believe that any legal action against Pledge may be counter-productive.

While the 90-day excuse satisfied the MU, it now appears that the company never had plans to pay artists.  Earlier this year, Rogers confirmed that PledgeMusic would no longer accept contributions to active and pre-sale campaigns.

The bankruptcy may now lead to major legal trouble for Rogers and his team.

Following the news of the crowdfunding platform’s bankruptcy, UK Music’s Chief Executive, Michael Dugher, immediately stepped in.  He called on Kelly Tolhurst to refer the company to the Competition and Markets Authority (CMA).  Tolhurst serves as Minister for Small Business, Consumers, and Corporate Responsibility.

Many musicians across the UK relied on crowdfunding website PledgeMusic to deliver payments from patrons, to pay for album recordings and costs.

These artists were already enduring long delays in receiving payments.  As a consequence, creators who used PledgeMusic’s services are likely to lose money, if it goes into administration without resolving its outstanding debts.

Rogers and his team reportedly owe independent artists between $1 million and $3 million.

Dugher added crowdfunding platforms remain an important medium to ensure emerging artists raise the capital needed to support their careers.  This includes covering album recording costs, music video costs, and other expenditures.

This is often a crucial step for them to progress through the music talent pipeline.  Musicians should be able to trust crowdfunding platforms to fulfill their obligation of delivering money pledged by fans and supporters.

I would therefore ask that you refer PledgeMusic to the CMA to ensure that this matter is properly investigated.

The British Musicians Union has also urged artists to reach out to the organization.

Stating the MU remains “extremely concerned” about how the bankruptcy will affect musicians owed money, the organization wrote,

The MU has been working with individual members who have had funds withheld on a case-to-case basis.  Members who have been affected but have not yet been in touch are advised to get in contact with their Regional Office.

 


Featured image by Benji Rogers.

12 Responses

  1. Mark

    The board of directors are all wealthy and have the ability to pay back the money to the artists that “borrowed “without permission.

    I guess stealing only gets you arrested when you are poor, and shoplift some baby food.
    If you are rich, and do it digitally in plane site, there needs to be a long investigation to prove a crime that the have already admitted to.

  2. Truth

    Society is fucked up.

    A black guy in the hood gets 10 years for selling pot. Won’t let him out.

    These wealthy guys get off with “Administration” after stealing from poor people.

  3. Johnny

    When will the musicians all come together and try to fix this huge mess they call the music business? What say you, Sir Paul, Sir Elton?

    • Jp

      I agree, on another note. How strong is the British Musician’s Union? Meaning how much clout does it have for standing up for artist?

  4. JW

    You know Benji doesn’t work at the company anymore and isn’t responsible for any of this right? You’re targeting the wrong guy! We would definitely like to know who the right people to go after are though, so please try to investigate and report on that!

    • Anonymous

      Totally Agee. He’s been out of the company for some time yet DMN pastes his face all over it.

      Regardless, how hard is it to pay the artists what fans agreed to pay them?

      • Viv M

        Here’s a way to get the people Pledgemusic owes money paid. Sue this “journalist” for libel and use the proceeds to pay them.

        • Sammy

          Absolutely agreed. It is the very height irresponsibility to allege crimes and post the photo of one person who is bare minimum NOT responsible for this debacle. Repent, DMN. Evil acts do not justify more evil acts.

  5. Anonymous

    These Pledge Music execs need to be sued- in both criminal and civil court. What a joke.

  6. Gary

    Hmmm…. Very hard to get any real information on all of this?
    All the focus seems to be on musicians not receiving monies owed… But, I’m a punter who hasn’t received the goods I paid for and now looks like I won’t get a refund either. My money’s gone somewhere – if not to the artist, then where!?
    Worse still, the PledgeMusic site still seems to be running as if nothing’s up! Surely there should be a great big sticker over it saying “Screwed! Do not invest!” !!

    • Marc DeGiovanni

      And that is the point!!!! As an artist, I didn’t know anything was completely wrong until May 16. I had pledgers write to me and tell me I was screwed. Never, not once, did PledgeMusic send an e-mail. All of those “open letters” written by Benji were on platforms not associated with PledgeMusic.