Loxala Development Fraud Case Study | Founders Don’t Forget

Case Study

The Loxala Development Conflict

How broken promises

Unfulfilled terms led to Loxala’s official response

Misleading claims

Brief summary

In late 2023, Hani Elgharabawi Founder and CEO of Loxala engaged Rocket Systems LLC (later presenting themselves as Rocket Systems Inc.) to build the Loxala platform, a global freelance marketplace.

The agreement included a scalable backend architecture, high-quality frontend with reusable components, Stripe integration, and timely delivery. Despite paying the full amount and maintaining clear communication, the final product delivered was incomplete, unscalable, and riddled with over 10,000 bugs. Key features, like backend logic and payout systems, were missing. What was promised in code was instead delivered as screenshots.

Parties Involved

Hani Elgharabawi

CEO of Loxala Global Inc (Client)

Garik Khachanyan

Owner (Development agency)

Anna Gigoyan

Project Manager of Rocket Systems LLC (Development agency)

Inna Simonyan

Project Manager of Rocket Systems LLC (Development agency)

Purpose

This case study is part of the Founders Don’t Forget (FDF) initiative to expose verified cases of professional misconduct, protect other startup founders from exploitation, and document how dishonest practices destroy trust, waste resources, and damage entire ventures. This is not about revenge, it's about transparency, accountability, and creating a safer ecosystem for founders worldwide.

Back to all emails

Purpose

Founders Don’t Forget (FDF) is a platform founded by Hani Elgharabawi to expose verified cases of professional misconduct, protect founders, and establish public accountability within the tech industry. Its mission is not revenge, but justice built on evidence, process, and visibility.

FDF Legal Engagement

Formal legal emails were sent by FDF to:

Garik Khachanyan

Owner of Rocket Systems LLC

Anna Gigoyan

Project Manager of Rocket Systems LLC

Inna Simonyan

Project Manager of Rocket Systems LLC

Each email outlined clear and documented allegations, including:

Failure to deliver backend logic.
Fabrication of progress reports
Switching technologies without consent (e.g., MongoDB to MySQL)
Misuse of payments
Sending screenshots instead of actual deliverables
Exploiting the trust of a non-technical founder

The emails

Offered 5 business days to respond
Invited them to submit evidence, explanations, or rebuttals
Warned that silence would be treated as acceptance of the facts as documented

Inna Simonyan & Anna Gigoyan’s Reactions

Both Inna Simonyan and Anna Gigoyan received the emails at their known addresses.
They opened and viewed the messages multiple times.
Neither replied, submitted evidence, or attempted to correct the record.
Their silence, despite clear visibility, was recorded as intentional non-cooperation.

Garik Khachanyan’s Response

Responded with:
- His tone was hostile and aggressive
- Offensive and unprofessional language
- His reply contained no factual counter-evidence, and instead focused on personal attacks and denia
Refused to acknowledge FDF’s legitimacy
Demanded unrelated "third-party proof"
Ignored multiple requests for productive dialogue

Outcome

All communication is archived and timestamped.
Inna and Anna’s silence and Garik’s documented replies are part of the official FDF public record.
The case is proceeding to:
- Public case study publication
- Legal and reputational escalation 
FDF will also notify relevant institutions and professional networks to ensure no future founder falls victim to similar misconduct.

Back to all emails

Engagement Start

The collaboration with Rocket Systems LLC began in the last two months of 2023

Key Milestones

Initial payment was made for Stripe integration (including payouts and bank setup).
Payment was also made for the Loxala Community logic, job matching logic, and freelancer level logic.
Anna Gigoyan confirmed via recorded video call and Google Chat that Stripe integration consisted of over 100 pages and was hosted on Rocket Systems LLC’s internal servers.
Inna Simonyan confirmed multiple times that job models and job logic had been fully implemented.
Garik Khachanyan confirmed many times that he was using reusable components for the frontend architecture.

When Things Started to Go Wrong

Despite confirmation and payment, no code was delivered for Stripe integration or the Loxala Community logic.
Freelancer levels, job matching logic, and “Find a job” components were either missing or only partially delivered.
Requests for verification, screenshots, and actual code were repeatedly ignored or met with unverified screenshots.
All communication eventually shifted to formal legal notices after persistent delays and lack of accountability.

Back to all emails

Technologies Agreed Upon

Backend: PHP Laravel
Frontend: React.js
Database: MongoDB
Scalable backend architecture suitable for a high-volume freelance platform
Reusable frontend components to ensure maintainability and consistency

Deliverables

Fully functioning Stripe integration for payouts and bank setup
Complete Loxala Community logic
Working job logic with job matching and ranking systems
Fully implemented freelancer levels.
Complete frontend code with reusable components for each feature set

Timelines and Budgets

Project was divided into sprints covering multiple months with payments made progressively
Over $100,000 was paid in total, based on agreements, milestone confirmations, and trust
Payments were made upon confirmation of feature completion and scope agreements
Several payments were made without receiving the corresponding deliverables, under the assumption of good faith and mutual trust

Back to all emails

Most deliverables were either incomplete, misrepresented, or completely missing.
Screenshots were provided instead of actual code, even for major modules like Stripe integration. When Mr. Hani Elgharabawi specifically requested the Stripe frontend code, Garik Khachanyan sent only backend screenshots, attempting to pass them off as frontend evidence. In a recorded video call, Anna Gigoyan clearly stated that the Stripe frontend module had been fully developed and was hosted internally on Rocket Systems servers. Despite this confirmation and full payment, the frontend code was never delivered. Garik’s response appeared to exploit Mr. Hani’s non-technical background by presenting backend screenshots as if they were frontend work. This constitutes a clear case of misrepresentation and deceptive delivery.
After independent QA testing, over 10,000 bugs were identified, indicating poor quality and lack of foundational backend logic.
Key components like the job logic, community system, and freelancer-level features were missing or non-functional.
Garik Khachanyan attempted to extort additional payments by demanding $17,000, then $16,000, and finally $15,000 in order to provide the code that had already been paid for.
No staging environment, working demo, or verifiable system was ever made available to validate the codebase.
Several critical modules, including backend logic and frontend flows, were never delivered or accessible for review.

Back to all emails

Confirmed deliverables were repeatedly not shared despite payment and documented proof of completion.
Key individuals gave verbal and written confirmation of completed work but failed to provide access to the actual code.
The development team used vague screenshots in place of deployable or reviewable code.
Communication was unprofessional, evasive, and in Garik’s case, abusive.
Inna Simonyan blocked all professional accounts associated with Mr. Hani Elgharabawi and Loxala once accountability was pursued.
Deliberate switching of agreed-upon technologies (e.g., using MySQL instead of MongoDB) without consent.
Requests for transparency were denied under false pretenses.
Final responses included denial of responsibility, refusal to cooperate, and verbal hostility.
The entire team consistently made false claims, intentionally misleading the client by confirming features that did not exist or had not been developed.
Communication was structured to create confusion and delay: team members would ask questions, disappear for long periods, and return the next day with unrelated or stalling queries — creating a loop of intentional time-wasting and misdirection.
These behaviors were not isolated or accidental but systematic and deliberate, designed to delay accountability while continuing to extract payments under the illusion of progress.

Back to all emails

Full Email Record Communication Between Parties

Back to all emails

Financial Loss: Over $100,000 was paid to Rocket Systems LLC based on confirmed deliverables, project milestones, and trust in the representations made. A significant portion of these funds was exchanged without receiving the promised product or functionality.
Lost Opportunities: Due to the incomplete and non-functional platform, multiple investment deals, strategic partnerships, and business development opportunities were lost. One of the most critical losses was a $19 million investment opportunity that fell through due to the platform’s instability and incompleteness. The launch of Loxala, a high-value freelance marketplace was severely delayed, costing both time and competitive advantage. The damage affected not only financial outlooks but also long-term scalability plans and global rollout strategies.
Reputational Damage: Loxala’s credibility was impacted in front of stakeholders, partners, and early supporters. Promises made to external collaborators and marketing channels had to be withdrawn or delayed, eroding trust in the brand and casting doubt on the founder’s ability to deliver on commitments made in good faith.
Time Wasted: More than one full year was lost in this engagement, including endless follow-ups, redundant clarification cycles, repeated validations, and attempts to recover deliverables that had already been paid for. This time could have been strategically invested in completing the platform, launching to the public, scaling operations, and engaging users and partners. The setback delayed the entire lifecycle of a product meant to be global in scope severely diminishing momentum, innovation opportunities, and market positioning.

Back to all emails

Emails Sent: Multiple formal emails were sent to the involved parties demanding delivery of paid features, including Stripe integration and community logic. These requests included time-stamped confirmations, formal 48-hour notices, and documentation of previous confirmations from the project managers.
Upcoming Campaigns and Public Awareness: A formal case study is being published and shared publicly to raise awareness about this misconduct. Video recordings, technical audits, and screenshots are prepared for public release. A series of awareness campaigns will be launched to prevent similar exploitation of non-technical founders and to hold unethical agencies accountable.
Planned Legal Action: Legal proceedings are currently being prepared against Rocket Systems LLC / Inc., Garik Khachanyan, Anna Gigoyan, and Inna Simonyan. These actions may include formal civil claims for breach of contract, fraud, professional negligence, and damages for reputational and financial loss. Documentation of email threats, hostile communication, video call evidence, and project scope violations will be included as part of the formal filings.
FDF Involvement: Founders Don’t Forget (FDF), a global initiative for startup founder protection, was activated. FDF sent legal emails documenting all allegations and offered the accused parties a chance to respond with evidence. Their refusal to cooperate and use of hostile language was recorded and archived.

Additional legal avenues are also being explored, including:

Claims for intentional misrepresentation and manipulation of a non-technical client.
Breach of technology agreements, including unauthorized switching from MongoDB to MySQL.
Use of Loxala’s name in their portfolios even after being notified of the damage caused.
Legal notices related to intellectual property misuse and potential defamation.
Misrepresenting development progress knowing the product would be presented to investors.
Knowingly delivering a non-functional product to Mr. Hani Elgharabawi during an active investment round, despite being fully aware that the platform would be presented to potential investors. This reckless conduct directly jeopardized a $19 million investment opportunity and exposed Mr. Elgharabawi to substantial legal, financial, and reputational risk. Rocket Systems, Garik Khachanyan, and the associated team continued to confirm deliverables they knew were either false, incomplete, or non-existent. This includes Stripe integration, backend logic, and complete frontend modules.

These false confirmations were made repeatedly through email, video calls, and written chats, all while Mr. Elgharabawi was actively pursuing external funding. Such behavior constitutes clear evidence of intentional deception during a critical financial transaction. Furthermore, the team’s knowledge that their actions could lead to liability or regulatory scrutiny for Mr. Elgharabawi deepens the severity of their misconduct.
This case is now subject to formal legal escalation. If criminal intent is proven, it may result in charges of fraud, breach of trust, and intentional interference with investment proceedings. The matter will be presented to appropriate legal jurisdictions, and regulatory authorities will be notified. The evidence compiled, including written communications, payment records, and development logs, will support both civil and criminal litigation.
The legal strategy includes cease-and-desist orders, digital forensics, and jurisdictional filings to pursue cross-border accountability. Additional steps may include injunctions, recovery of funds via international claims, and collaboration with local regulatory agencies and investor protection bodies.

Back to all emails

Mistakes to Avoid as a Founder

Never rely solely on verbal confirmations, always demand verified, reviewable proof of work before releasing payments. 
Avoid prepaying for development without a clear and enforceable agreement around staged deliverables and review cycles. 
Don't assume goodwill or professionalism, enforce contracts and escalate early if trust is being abused.

Advice to Other Founders

If you're non-technical, bring in a trusted technical advisor to review deliverables and architectures regularly.
Implement strict sprint review protocols: no code, no payment.
Use escrow or milestone-based systems where funds are only released upon verified delivery.
Keep independent backups of communications and request regular access to staging environments and repos.

Red Flags in Hiring or Agency Collaboration

Overuse of vague terms like “it’s already done” or “hosted internally” without any visible code or live previews.
Resistance to sharing actual code or walkthroughs, using screenshots instead.
Constant delays combined with unclear or manipulative communication strategies.
Use of false urgency, pressure for more payments, or gaslighting non-technical stakeholders.

Back to all emails

The Loxala Development Conflict

This case study

Blog

Freelance Scams and Fake Prints: How to Spot Red Flags Before It’s Too Late

The Real Cost of Silence