This San Francisco couple defrauded their AI investors out of $60M

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.