The founders of San Francisco AI startup GameOn Technology have been charged with orchestrating a $60 million fraud scheme targeting investors between 2018 and 2024.
The allegations: Federal prosecutors have indicted Alexander Beckman and Valerie Lau Beckman on 25 criminal counts, including conspiracy, wire fraud, securities fraud, and identity theft.
- Beckman founded GameOn Technology (later renamed ON Platform) in 2014, developing customer service chatbots for major sports leagues and luxury brands
- The company’s business model allegedly proved unsustainable, relying entirely on investor funding rather than genuine revenue
- Federal investigators found the company’s actual annual revenue never exceeded $1 million, despite claims of up to $72 million in quarterly earnings
The alleged scheme: Beginning in 2018, the couple engaged in systematic fraud to attract and maintain investor interest through various deceptive practices.
- They allegedly inflated revenue figures, exaggerated customer relationships, and forged critical documents
- Valerie Lau allegedly participated by manipulating documents, forging audit reports and bank statements, and misusing real individuals’ identities
- In one instance, Lau allegedly fabricated documentation showing a $13 million account balance when the actual amount was just $25
Financial impact: The fraud scheme allegedly caused significant harm to multiple stakeholders while enriching the founders.
- Investors were defrauded of approximately $60 million over six years
- Employee salaries went unpaid while the couple allegedly diverted funds for personal use
- The diverted funds were reportedly used to purchase expensive real estate and finance their 2023 wedding
- If convicted, they may have to forfeit assets including a $4.2 million house and a Tesla Model X
Detection and collapse: The fraudulent operation began to deteriorate as investor scrutiny increased in recent months.
- The scheme started unraveling in late 2023 and early 2024 when investors began asking more detailed questions
- Employees and customers were allegedly impacted by late payments and misrepresented business relationships
- Neither ON Platform nor its major brand customers have provided public comment on the situation
Looking ahead: This case highlights the increasing scrutiny of AI startups and their financial claims, particularly as investors become more discerning about sustainable business models in the artificial intelligence sector.
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