Authorities arrested GameOn Technology founder Alexander Charles Beckman and attorney Valerie Lau Beckman (a married couple) yesterday for allegedly defrauding investors of $60 million.
In a 25-count indictment, the U.S. Department of Justice said the couple allegedly falsified dozens of bank statements and audit reports to defraud GameOn investors. The alleged fraud lasted six years.
Beckman was the founder and former CEO of GameOn and last year he resigned of the company after the co-founders claimed at the time that $11 million had disappeared from the company’s bank account, with only 37 cents remaining. The company closed its doors and laid off staff in July 2024. Authorities charged him and attorney Valerie Lau Beckman — a married couple — with conspiracy, wire fraud, securities fraud, identity theft and other crimes. Lau was also charged with obstructing justice.
According to the indictment filed Jan. 21, Beckman, 41, and Lau, 38, both of San Francisco, allegedly conspired to defraud GameOn investors, GameOn and a bank. GameOn was a private company based in San Francisco that offers software claiming artificial intelligence functionality that mimics human conversation and interaction, commonly referred to as a chatbot or “chat”.
Its clients included prominent American professional sports leagues and teams as well as major fashion and luxury retail brands. Over the course of the alleged scheme, from September 2018 to July 2024, Beckman raised more than $60 million from GameOn investors. Lau was an attorney who worked on GameOn’s corporate and transactional matters from at least 2016 to 2024.
The couple married in October 2023. Beckman and Lau allegedly used more than $4 million of GameOn investor funds for personal expenses, including the purchase of residences in San Francisco, payments to private schools and payments for their wedding venue.
“The Bay Area is home to incredible innovation and hard-working entrepreneurs, but innovation cannot thrive on fraud. Schemes like those with which defendants are charged threaten our financial markets and mislead investors,” First Assistant United States Attorney Patrick D. Robbins said in a statement. “This indictment should remind us that we will investigate and hold fraudsters accountable. »
“Fraud undermines the integrity of our financial markets and erodes investors’ trust in them,” said Dan Costin, acting special agent with the FBI, in a statement. “The FBI is committed to ensuring our financial markets remain fair and transparent by investigating and holding to account those who engage in deceptive practices.”
As the indictment alleges, Beckman’s statements to GameOn investors often described nonexistent revenues, inflated cash balances, and false or exaggerated customer relationships. To further the scheme, Beckman allegedly used the names of at least seven real people, including fake emails and signatures, without their permission, to distribute false and fraudulent financial and business information and documents about GameOn in the aim to defraud GameOn and its investors.
Among the individuals whose names Beckman used to commit the fraudulent scheme were a GameOn chief financial officer, two bank employees and an employee of a major professional sports league, the document states. Beckman also fabricated two GameOn audit reports using the names, signatures and trademarks of reputable accounting firms, including one of the Big Four accounting firms, to validate false financial statements, and distributed more than a dozen fake bank statements for GameOn accounts as part of the investigation. scheme, the indictment alleges.
After changing law firms several times, Lau joined a venture capital firm in September 2021. Lau allegedly provided Beckman with real audit reports that she obtained from her own employer and which Beckman then used to create fake audit reports for GameOn. The indictment alleges that Lau personally emailed one of these false audit reports to the representative of a GameOn investor, knowing it was fake, in order to induce to invest more in the company, the Justice Department said.
In June 2024, Lau furthered the fraud scheme by submitting a false GameOn account statement (a statement that she knew had the GameOn balance at a certain financial institution falsely showing more than $13 million when the true balance of business was only $25.93) at a bank branch in San. Francisco and asked a bank employee to keep the fake statement in an envelope at the bank so Beckman could pick it up later that day. Lau knew that Beckman planned to collect the false statement from a GameOn executive who represented a major investor on GameOn’s board of directors. Beckman retrieved the false statement from GameOn’s manager that day, the indictment states.
In August 2024, when Lau’s employer contacted Lau about GameOn, Lau lied to his employer about his work for GameOn, then attempted to delete hundreds of files relating to that work on GameOn from the company’s files. his employer at a time when a grand jury investigation into GameOn was underway. on hold.
Beckman and Lau were arrested this week and made their first appearance in federal court in San Francisco. They pleaded not guilty. We attempted to reach Beckman for comment.
An indictment simply alleges that crimes were committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face the following maximum penalties: 20 years in prison for each count of wire fraud and wire fraud conspiracy, five years in prison for the securities fraud conspiracy count, 30 years in prison for each count of conspiracy to commit bank fraud and making false statements to a bank; 10 years in prison for carrying out monetary transactions in goods derived from a specified illegal activity; and two years in prison for each count of aggravated identity theft. Lau also faces a maximum sentence of 20 years in prison for obstructing justice.
Assistant U.S. Attorney Patrick O’Brien is prosecuting the case with the assistance of Lance Libatique and Maryam Beros. The prosecution is the result of an FBI investigation. Beckman and Chief Product Officer Kalin Stanojev founded the company in 2014 to create an enterprise-grade conversational AI platform.
Last July, Stanojev and Jon Layman, the company’s chief operating officer (neither has been charged), wrote a letter to shareholders about other company executives claiming to have discovered, to their “shock and horror” , that the bank account which was supposed to contain millions was almost empty. The letter states that the board pressured Beckman to resign on July 1, 2024.
“This money was essential to the continued operations of the company in which you invested,” the letter states. “To our surprise and horror, we discovered that in reality the account balance in this bank was only 37 cents. This discovery plunged the company into a liquidity crisis, and the board and management were forced to act quickly, hoping to avoid bankruptcy.
In a July 2024 interview, Beckman confirmed to GamesBeat that he left the company in early July. He said he was unable to discuss the company’s decision to cease operations.
“From the beginning, I only wanted what was best for the company and its employees. And I resigned because I thought it was in the best interest of the company. I am aware of a communication describing my departure. This communication contains a number of exaggerations and inaccuracies and does not give an accurate picture of what happened,” he said. “I look forward to correcting the facts, I will provide the full story at the appropriate time.”
Beckman said he couldn’t say whether there was litigation. He confirmed that the company raised $35.5 million in a few rounds and now has over 60 employees. He said he loved the business and it was an “incredibly painful time.” More of what he said is in our published story at the time.
