Well, the devs are responsible for either delivering a project, or returning the kickstarter money. Even in cases where the money has already been spent. I still think Lord Dullard needs to pay us back despite his Roguelike project not working out near the end (although it feels a bit odd asking for money back in his case when it looked like he at least tried). In this case though, Kickstarter's terms of service clearly do state whether the developer's project succeeds or not, they are responsible to provide the project.
Not only that, but if they're doing something this blatant at this point, then they are liable for lawsuits. Hell, given I did toss money into this project, I'm half tempted to contact the poor landlord that has to put up with this crap and see if I can contribute towards that legal fund as well. I really don't care how much talent they have if they're going to be leeches to other people like this.
As for laws broken... well, if they have done no work on conXspress, then they can be liable for fraud. That's kinda what's going on when you have nothing to show for what you do. No money can be taken from the devs until they go to court and the court finds them at fault for it. If they do, they'll likely have to pay back all that is owed to others, and they'll also can incur a few months in prison. Oddly enough, fraud has more lenient sentencing rules than theft or burglary.
It does seem that this studio has talent at least, but it does look a lot like grifting is quite likely what they're doing. I'm not sure I can trust someone to release a game when they're not trying to pay the rent and are driving the electric bill up. If you act that big of an asshole, you're asking for trouble.
Sadly this shit is bound to happen with kickstarter, but it's hardly kickstarter's fault. I think if anything though, it's getting more and more worrying that kickstarter might just be a tool for those established in the industry to release games, rather than a way for interesting and upcoming devs to get teh funding they need in order to make their dream game come true. It's pretty crappy that it's this sorta behavior that's going to discourage me from taking chances anymore.