San Francisco AI startup founder and wife indicted in $60 million fraud scheme

In brief: The founder of an AI startup and his wife were indicted this week on charges of defrauding investors in a scheme spanning six years. If convicted, they could face decades in prison and the forfeiture of assets obtained through the alleged scheme.

Alexander Beckman, founder of the AI startup GameOn Technology (now ON Platform), and his wife, attorney Valerie Lau Beckman, were indicted on 25 charges, including conspiracy, wire fraud, and identity theft. According to the US Attorney’s Office, the couple allegedly defrauded investors out of $60 million over six years. If convicted, Alexander faces more than 60 years in prison, while Valerie could get over 80 years.

Beckman founded GameOn in 2014, which gained early recognition for its customer service chatbot technology. The company had several high-profile clients, including the NBA, Riot Games, and Armani Exchange. However, prosecutors allege that the company’s business model was unsustainable, with free pilot programs and revenue-sharing agreements that rarely generated income. Investigators claim GameOn even paid some clients extravagant fees without receiving payments in return.

Beginning in 2018, Beckman allegedly orchestrated an elaborate scheme to secure millions in investor funding to cover business and personal expenses. The lengthy indictment (below) claims he exaggerated revenue figures, inflated cash balances, and fabricated customer relationships to mislead investors.

Beckman Indictment via Scribd

The indictment also accuses his wife of forging documents, including audits and bank statements, and stealing sensitive information from her former employer, a venture capital firm. One indictment detail alleges Lau falsified a bank account statement to show a balance of $13 million when the account had just $26. While GameOn’s annual revenues never exceeded $1 million, Beckman reportedly told investors the company earned $72 million in a single quarter of 2023.

Prosecutors say the couple used investor funds for personal expenses, including a $4.2 million San Francisco home, a Tesla Model X, and their 2023 wedding. Meanwhile, GameOn employees sometimes went unpaid as the company struggled to meet payroll and other financial obligations.

The scheme reportedly began unraveling in 2023 as investors questioned the company’s financials. Beckman allegedly admitted to inaccuracies in an audit but continued fabricating documents and creating fake email accounts for real people to cover his tracks.

In June 2024, after an investor sought to verify a bank statement in person, Lau allegedly planted a fake statement at the bank, an incident captured on security cameras. She resigned from GameOn the following month.

ON Platform, the rebranded version of GameOn, declined to comment on the charges. High-profile clients like the NFL, Valentino, and Live Nation also failed to respond to requests for comment.

If convicted, Alexander Beckman could face over 60 years in prison, while Valerie Lau Beckman’s potential sentence exceeds 80 years. The couple will also have to forfeit all assets obtained through the fraud.