UNITED STATES DEPARTMENT OF JUSTICE Office of Special Investigations
Case File: DEEPONE-2024-0451
Classification: EYES ONLY — DO NOT LAMINATE (moisture damage reported on all previous copies)
EXECUTIVE SUMMARY
This office has been conducting a formal investigation into Innsmouth AI, Inc. (hereafter “the Company”) for a period of fourteen months. Over the course of this investigation, we have lost four senior agents to voluntary coastal relocation, one forensic accountant to what she describes as “a better calling,” and approximately 800 pages of subpoenaed documents to what the Company’s legal team describes as “tide-related disclosure.”
We believe we are close to a breakthrough. We also note that three members of the investigative team have begun requesting their lunch meetings be held near the harbor, which we are monitoring.
BACKGROUND
Innsmouth AI was incorporated in Delaware — of course it was — in 2019, with a stated mission of “unlocking the latent depth of human potential through recursive neural transformation and proprietary aquatic-adjacent algorithmic frameworks.”
The SEC flagged the company in early 2022 after a routine audit of their Series B financials revealed the following anomalies:
- Revenue projections listed in fathoms rather than dollars
- An expense category labeled simply “THE TITHE” accounting for 34% of operating costs, recipient undisclosed
- A depreciation schedule that listed several senior employees as depreciating assets
- Payroll records that ceased for seventeen employees simultaneously in Q3, replaced by a line item reading “RETURNED”
- The CFO’s signature had, over the course of twelve months, become progressively less legible and progressively more damp
FINDINGS OF THE INVESTIGATION
I. Corporate Structure
Innsmouth AI operates through a labyrinthine holding structure that our forensic team describes as “unprecedented” and our senior partner describes as “genuinely upsetting to look at for extended periods.”
The parent entity is registered in the Cayman Islands. Its parent is registered in a jurisdiction our researchers cannot locate on any current map. Its parent is listed as “The Deep Compact, Est. Before Reckoning,” which does not appear in any corporate registry but which has, on three occasions, sent our office very formal cease-and-desist letters written on materials that are not paper.
The board of directors includes:
- Obed Marsh IV, CEO — currently unreachable by phone, reachable by specific tidal frequencies
- Dagón Ventures LLC — listed as holding a 40% stake; registered agent is a post office box in Innsmouth, MA that the postal service has flagged as “intermittently submerged”
- Three independent directors listed as residing at coordinates that correspond to a location approximately 200 miles off the New England coast at a depth of 6,000 feet
When our agents attempted to serve subpoenas to the board, the process server reported that the address was accessible only at low tide and smelled strongly of antiquity.
II. The Product
“The Change” — Innsmouth AI’s flagship personalization engine — has been the subject of 2,300 user complaints filed with the FTC. Common grievances include:
- Unauthorized modification of dietary preferences toward raw seafood
- Unexplained elongation of fingers following extended use
- App continuing to run after uninstallation, device disposal, and in two cases, device submersion
- Terms of Service updates that users report agreeing to “in a dream, beneath the water, before a vast and patient presence”
- Data being shared with third parties the privacy policy describes as “elder affiliates whose interests predate the concept of consent”
The Company’s response to all FTC complaints has been identical: a single sentence reading “The user has completed their journey and no longer requires resolution.”
Our digital forensics team attempted to reverse-engineer the app’s core algorithm. The lead engineer submitted a 200-page technical report, the final 140 pages of which consisted of increasingly large drawings of the ocean. She has since relocated to Gloucester and does not return calls but has been confirmed alive and “very at peace.”
III. Financial Crimes
The financial irregularities at Innsmouth AI represent some of the most creative accounting this office has encountered in thirty years of federal prosecution.
Money laundering is suspected through a network of shell companies including:
– Dagon Capital Management
– Deep Reef Consulting Group
– Y’ha-nthlei Data Solutions
– Marsh & Sons Ichthyological Services (no employees, infinite fish)
– The Sunken Plain Holdings, which files taxes but whose returns list total assets as “immeasurable” and net income as “beyond the reckoning of surface minds”
The Company has raised $340 million across five funding rounds. Our forensic accountants can account for approximately $12 million of this. The remainder appears to have been transferred to offshore accounts in the most literal possible sense of that phrase.
Notably, Innsmouth AI has never reported a loss. When auditors question this, they are invited to the compound for a “financial alignment retreat” and return three days later unwilling to pursue the matter further and newly interested in tide charts.
IV. Labor Violations
The Department of Labor has referred seventeen violations to this office. Key findings:
Employees are required to sign a 156-page employment contract that includes, buried in Schedule Q, a clause requiring workers to submit to “gradual vocational integration with the Deep Purpose.” HR described this to our investigators as “standard culture-fit language.”
The Company’s voluntary attrition rate is listed as 0%. Our investigators note that this is because the Company does not classify employees as having left — they are classified as having “deepened their commitment.” When pressed, HR explained that former employees “remain accessible, in a sense, in the waters off the eastern seaboard, should you know the right frequencies.”
The employee wellness program includes mandatory “immersion therapy,” cold water conditioning, and a meditation practice the Company calls “the long forgetting.” OSHA has no existing framework for several of the conditions described.
Glassdoor reviews remain 4.9 stars. Investigators note that all reviews were posted between 3 and 4 AM and several contain phrases in languages our translation software cannot identify.
V. The Compound
On March 14th, agents executed a search warrant on the Innsmouth, Massachusetts headquarters.
The building appeared, from the street, to be a standard converted mill building of the type common to New England tech campuses. Inside, agents found:
- Seventeen floors, in a building that from the exterior appeared to have four
- A server room at sub-basement level six that was fully flooded and, according to our IT consultants, actively running and performing better than expected
- A boardroom with a table large enough to seat approximately forty, despite the Company listing eleven full-time employees
- Employee lockers containing personal items, identification documents, and in four cases, clothing that had been neatly folded and left behind as though the owner had simply… stepped out of it
- A room labeled COMPLIANCE that none of our agents would enter twice
- A document shredder that was filled with salt water and fish
- In the sub-basement, accessible through a door that was not on the blueprints, a chamber of considerable size opening onto what appeared to be the ocean, though the nearest coastline is eleven miles away
The search was concluded early when three agents simultaneously requested transfers to coastal postings and the warrant expired, somehow, two days before it was issued.
WITNESS TESTIMONY
Agent Patricia Holmwood, lead investigator (Months 1–8):
“The deeper we went into their records, the more I felt we were looking at something genuinely unprecedented. I still believe the case is prosecutable. I think about it every day. I think about it from the shore, mostly. The water here is very clear.”
(Agent Holmwood is currently on administrative leave in Bar Harbor, Maine.)
Ronald Upton, forensic accountant:
“I’ve done Enron. I’ve done Theranos. I’ve done three crypto exchanges and a Ponzi scheme run out of a storage unit in Scottsdale. I have never seen books like this. I don’t mean that the fraud was clever. I mean that the books do not appear to have been written by entities with a conventional understanding of time, debt, or the separation between the living and the sea.”
Former Innsmouth AI employee, identity withheld:
“I joined because the compensation was incredible and the mission resonated with me. The first six months were normal — good, even. Then the Friday Congregations started getting longer. Then they moved them to the basement. Then deeper. I can’t tell you what was said there because I don’t have words for it anymore, just the feeling of it. Like being very small and very old and very accepted. I miss it every day. Please don’t make me go back. Please.”
Obed Marsh IV, CEO, via written statement submitted by legal counsel and delivered in a sealed container:
“Innsmouth AI operates in full compliance with all applicable laws and several inapplicable ones. Our users have freely chosen transformation. Our employees have freely chosen deepening. Our investors have freely chosen the tide. We invite the Department of Justice to visit our facility for a tour at its earliest convenience. We recommend visiting at low tide. We recommend bringing a change of clothes. We recommend not being too attached to the clothes.”
CURRENT STATUS
This investigation is ongoing.
We have filed for three injunctions, two of which were dismissed and one of which the judge described as “making him feel strange” before requesting reassignment to an inland district.
We have referred the matter to the FBI’s Financial Crimes unit. The referring agent noted that the file itself seemed heavier than it should be and occasionally damp.
We are currently seeking a special prosecutor with experience in financial fraud, corporate malfeasance, and jurisdictions that predate the continental shelf. Applicants should be comfortable in waders.
A grand jury has been convened. We have lost two jurors to the coast. A third has begun attending sessions in a wetsuit, which is not against the rules but which we feel is worth noting.
We remain committed to justice.
We remain committed to the surface.
This report was prepared by the Office of Special Investigations, Department of Justice.
Four copies were printed. Two were recovered.
The other two are out there somewhere.
We can hear them, sometimes, at night.
They sound like the deep.
CASE STATUS: OPEN
PROBABILITY OF PROSECUTION: RECEDING
PROBABILITY OF TRANSFORMATION: CLASSIFIED
— File closed for the evening. The tide is coming in.
