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.
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.