FBI: GameOn Founder Cheated AI Investors Out of $60 Million
The founder of artificial intelligence (AI) firm GameOn has been charged with defrauding his company’s investors.
The FBI last week charged Alexander Beckman, the company’s former CEO, with offenses including conspiracy, wire fraud, securities fraud and identity theft. Also charged was Valerie Lau Beckman, who is married to the founder and also worked as an attorney for GameOn.
According to a news release from the U.S. Attorney’s Office, Northern District of California, GameOn makes AI chatbot software for customers that include professional sports leagues and high-profile retail brands.
The company raised more than $60 million from investors between September 2018 and last July, with Beckman and Lau allegedly using $4 million of those funds for personal expenses.
“The Bay Area is home to incredible innovation and hard-working entrepreneurs, but innovation cannot grow through fraud. Schemes like the ones that defendants are charged with threaten our financial markets and cheat investors,” First Assistant United States Attorney Patrick D. Robbins said in the release.
“This indictment should serve as a reminder that we will investigate and hold fraudsters accountable.”
Prosecutors allege that Beckman’s statements to investors often included nonexistent revenue, inflated cash balances, and fake or exaggerated customer relationships. He allegedly used the names of several real people without their consent, including his own CFO, bank employees and an employee “of a major professional sports league,” the release added.
For her part, Lau is accused of providing Beckman with audit reports from a venture capital firm where she worked that he used to craft phony audit reports for GameOn. Prosecutors say she later knowingly shared a fake bank account statement showing GameOn with $13 million in the bank, when it actually only had $25.93.
Both Beckman and Lau face decades in prison if convicted.
In other fraud-related news, PYMNTS last week explored the use of geolocation technology in fraud prevention in an interview with Radar CEO and Co-Founder Nick Patrick.
“Geolocation is central to modern fraud detection across a number of industries,” Patrick told PYMNTS. “Understanding any sort of anomalous geolocation data coming from a particular device or inconsistent location data across devices for the same account can help detect fraud and stop bad actors.”
Geolocation has for years been associated with consumer engagement, such as push notifications when entering a mall or personalized messages at a drive-thru. But its transformation into fraud prevention could be a boon for digital security, the report said.
“Fraudsters are always going to fraud,” Patrick said. “But with the right tools, businesses can stay one step ahead.”
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