FBI claims GameOn founder forged six years of financial records in brazen scheme.
Credit: Feodora Chiosea | iStock / Getty Images Plus
The founder of an AI startup in San Francisco was indicted this week for allegedly conspiring with his wife for six years to defraud investors out of $60 million.
According to a press release from the US Attorney’s Office in the Northern District of California, Alexander Beckman—founder of GameOn Technology (now known as ON Platform)—and Valerie Lau Beckman—an attorney hired by GameOn who later became his wife—were charged with 25 counts, including conspiracy, wire fraud, securities fraud, identity theft, and other offenses. Lau also faces one charge of obstruction of justice after allegedly deleting evidence.
If convicted, the maximum penalties for Beckman, 41, could exceed 60 years and for Lau, 38, potentially 80 years.
GameOn was founded in 2014 and later became known for developing a popular customer service chatbot functionality that today is used by major sports leagues like the NFL and high-end luxury brands like Valentino and Armani Exchange.
In the indictment, it’s alleged that Beckman’s business plan for GameOn was unsustainable. The AI startup initially offered its chatbot as a “free pilot without any contract” and seemingly only rarely benefited from revenue-sharing agreements. GameOn even sometimes would pay large annual fees to customers without receiving anything in return, including in one year paying “hundreds of thousands of dollars” to a sports league while receiving “no payments and no revenue sharing,” an FBI investigation found.
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To keep the business afloat, Beckman depended entirely on investors, the indictment alleged. Seeking millions to cover both business and personal expenses, Beckman allegedly dreamed up a “brazen and wide-ranging” scheme to defraud investors starting in 2018, the indictment said.
To further the alleged scheme, he “often described non-existent revenue, inflated cash balances,” and “otherwise exaggerated customer relationships,” the US Attorney’s Office said, to convince investors to spend millions. As Beckman’s accomplice, Lau allegedly manipulated documents, including documents allegedly stolen from the venture capital firm that employed her while supposedly hiding her work for GameOn.
The scheme apparently also included forging audits and bank statements, as well as using “the names of at least seven real people—including fake emails and signatures—without their permission to distribute false and fraudulent GameOn financial and business information and documents with the intent to defraud GameOn and its investors,” the US Attorney’s Office said.
At perhaps the furthest extreme, Lau allegedly falsified account statements, including once faking a balance of over $13 million when that account only had $25 in it. The FBI found that GameOn’s revenues never exceeded $1 million in any year, while Beckman allegedly inflated sales to investors, including claiming that sales in one quarter in 2023 got as high as $72 million.
Beckman and Lau allegedly went to great lengths to hide the scheme while diverting investor funds to their personal accounts. While GameOn employees allegedly sometimes went without paychecks, Beckman and Lau allegedly stole funds to buy expensive San Francisco real estate and pay for their wedding in 2023. If convicted, they may be forced to forfeit a $4.2 million house, a Tesla Model X, and other real estate and property purchased with their allegedly ill-gotten gains, the indictment said.
It took about five years for the cracks to begin to show in Beckman’s scheme. Beginning in 2023, Beckman increasingly started facing “questions about specific customers and specific revenue from those customers,” the indictment said. By February 2024, Beckman at last “acknowledged to at least one GameOn consultant” that a flagged audit report “did not contain accurate financial information,” but allegedly, he “attempted to shift blame to others for the inaccuracies.”
His alleged deflections, however, perhaps got him caught after he supposedly started creating fake email addresses of real financial institution employees to continue to raise money while questions were still swirling. Around June 2024, an investor partner serving on GameOn’s board of directors asked to visit a bank branch to see a statement. Allegedly, Lau planted a fake statement at the bank to continue to cover up the scheme, a visit that the FBI showed in the indictment was caught on security cameras.
Soon after, Beckman resigned from GameOn in July 2024, the indictment suggested.
Employees, customers allegedly also harmed
ON Platform did not respond to Ars’ request to comment, even though GameOn employees and customers were also allegedly harmed by the scheme.
“Beckman and Lau knew that GameOn depended on new investor funds to operate, burned through its funds, received overdraft notices from banks, was delinquent in paying certain customers, and often was on the brink of not having enough money in the bank to operate and make payroll,” the indictment said. And they “knew that GameOn was late to pay payroll on multiple occasions and used individual bank accounts and credit cards to pay their employees.”
Further, Beckman “misled GameOn investors by describing certain customer relationships as producing revenue for GameOn when in fact Beckman knew that GameOn owed those customers money and was regularly late in paying them.”
Ars reached out to several ON Platform customers listed on the company’s site, including the NFL, the United Soccer League, Valentino, Armani Exchange, and Live Nation, to find out how some of the biggest brands are responding to the indictment. None of the brands contacted responded by the time of this writing.
