Lily Robotics, a failed drone startup that closed last month amid a consumer-protection civil suit from the San Francisco District Attorney’s office, may now be the subject of a criminal investigation. Earlier this month, law enforcement agents raided the company’s San Francisco headquarters for a potential criminal investigation against the company, according to one source who asked to remain anonymous because they were not authorized to speak openly about the matter.
When contacted by FORBES about the visit from law enforcement individuals, Henry Bradlow, Lily Robotic’s cofounder and chief technology officer, said he could not comment “on rumors or speculation” and hung up the phone. A spokesperson for the San Francisco District Attorney’s office said that he could not confirm or deny if a raid had occurred.
A criminal investigation would be the latest in a series of troubles for Lily, a much-hyped drone startup that promised to build a self-piloting, flying camera that could follow users while capturing photos and video. The company launched with a viral video, which helped to garner $34 million in pre-orders and led to a $15 million round of investment from venture investors including Spark Capital. The company said it would close last month and refund its customers after saying it was “racing against a clock of ever-diminishing funds” and was unable to raise a new round of funding to pay for manufacturing.
The day after Lily sent that email to customers, the San Francisco District Attorney’s office announced that it had filed a lawsuit and temporary restraining order request against the company for falsely promoting its yet-to-be-launched product. At the center of that suit was the company’s launch video, featuring a four-propeller robot whizzing around a kayaker and snowboarder which, according to alleged correspondence in the lawsuit, was purposefully shot with non-Lily Robotics cameras and drones to make it seem that the company’s device had certain capabilities. The district attorney had been conducting its investigation for months prior to the filing of the suit, one source told FORBES.
“I am worried that a lens geek could study our images up close and detect the unique Gopro lens footprint,” Lily CEO Antoine Balaresque wrote in an email to the filmmaker hired to make the film. “But I am just speculating here: I don’t know much about lenses but I think we should be extremely careful if we decide to lie publicly.”
According to a different unnamed source, the company who made the video, CMI Productions, has also not been paid in full for its work. A CMI employee did not respond immediately to a request for comment. CTO Bradlow did not respond to questions about the video payments before hanging up on FORBES. A Lily spokesperson declined to comment on the lawsuit to FORBES, though the company is expected to file a response to the district attorney on Thursday.
FORBES visited Lily’s offices on Tuesday, but did not enter the building. The warehouse building had its gate closed that was secured by a padlock and it was unclear if anyone was inside. There was one unopened package left between the door and the metal gate.
Some customers have also yet to receive any money back from pre-orders, which ranged from $499 to $899. Jim Fawcette, who paid pre-order money in May 2015, said he has not had heard from the company about the status of his refund.
In a survey of Lily customers in a private Facebook group with more than 2,000 people, users from North America, Europe, Asia and elsewhere had said they had received refunds. According to one customer, some received an email notification that funds were on the way, while others had money simply appear in their bank accounts.