In the world of startups, there's fraud — and then there's fraud. It's one thing for entrepreneurs to bilk venture capitalists with a sketchy PowerPoint. But using money meant to buy baseball bats and uniforms to fund your company? Despicable.

That's the charge laid on Terry Drayton, the CEO of Count Me In, a Seattle-area startup which processes membership dues for youth sports clubs from Alaska to New Jersey. A lawsuit (PDF) by the Montclair United Soccer Club has uncovered an email by Drayton in which he admits to mixing registration fees owed the club with company money used to buy hardware and software and pay debts; the group says Count Me In still owes it $142,000. The Nordic Skiing Association of Anchorage says Count Me In owes it $150,000. And Eastlake Little League, a baseball club in a Seattle suburb, says Count Me In owes it $70,000. TechFlash reports Count Me In laid off its president and several other employees in October.