A startup founder was arrested on charges of using VC money to pay for her house and a Caribbean wedding

Toronto , Canada - 22 June 2022; Shiloh Johnson, Founder & CEO, ComplYant, on Centre Stage during day two of Collision 2022 at Enercare Centre in Toronto, Canada. (Photo By Stephen McCarthy/Sportsfile for Collision via Getty Images) Stephen McCarthy/Sportsfile for Collision via Getty Images Shiloh Luckey raised millions from top venture investors to build a tax-compliance startup.

She was arrested in Fort Lauderdale and could face the possibility of up to 60 years in prison.

The company's seed round was led by Craft Ventures, the firm cofounded by White House advisor David Sacks.

Shiloh Luckey raised millions from top venture investors to build a tax-compliance startup and regularly offered personal finance advice to her thousands of TikTok followers.

Last week, she was arrested in Florida and charged with crimes that carry decades in prison for allegedly deceiving VCs and siphoning off funds to pay for her house, a Tesla, and her Caribbean wedding.

The case highlights a vulnerable truth in venture capital: Investors routinely write multimillion-dollar checks into young companies with little financial history and potentially unaudited numbers, putting enormous weight on what founders tell them.

That system depends on trust, which can break down when the story investors are being sold bears little resemblance to the underlying business of the startup.

Luckey did not respond to requests for comment.

She was arrested in Fort Lauderdale before she attempted to board a cruise ship for vacation, according to the Department of Justice.

Luckey was released on bond and is expected to appear in federal court in Los Angeles in the coming weeks.

Luckey founded ComplYant in 2019 to help small businesses navigate tax regulations.

In 2022, the company closed a $5.5 million seed round led by Craft Ventures, the San Francisco venture firm cofounded by the investor and White House advisor David Sacks. (A spokesperson for Craft did not respond to a request for comment.) Business Insider first reported on Luckey, who formerly went by Shiloh Johnson, in 2024 after her startup abruptly closed and she cut off contact with employees, some of whom discovered 401(k) contributions were missing.

In a 15-page indictment, prosecutors allege that Luckey misrepresented herself to investors as a CPA.

She also used money not in ComplYant's accounts to buy a house in Los Angeles through what is known as a "check kiting scheme," the indictment alleges.