Founder of $80 million AI chatbot startup GameOn indicted for fraud in San Francisco

Fraud allegations have once again sent shockwaves through the startup world, this time centering on GameOn, a San Francisco-based AI chatbot startup recently valued at $80 million.

Federal prosecutors revealed Thursday that Alexander Beckman, the 41-year-old founder and CEO of GameOn, orchestrated a sweeping fraud over six years, resulting in over $60 million in losses for the company and its investors, according to a report from Reuters.

“The founder of GameOn, a San Francisco artificial intelligence startup, has been indicted for running a “brazen and wide-ranging” six-year fraud that cost the company and investors more than $60 million, federal prosecutors said on Thursday,” Reuters reported.

The revelations come just six months after Beckman resigned as CEO, reportedly under pressure. Shortly after, the company laid off its estimated 60 employees following the discovery that $11 million in cash was missing. In a letter to shareholders, other company officers described their “shock and horror” upon finding only 37 cents in an account that was supposed to hold millions. GameOn had previously claimed to have raised $35.5 million from investors.

With the latest indictment, Beckman faces 23 criminal charges, while his wife, Valerie Lau Beckman, 38, an attorney involved in GameOn’s operations, is charged with 16 counts. Both were arrested and have pleaded not guilty.

The charges against the couple include fraud, securities fraud, conspiracy, and identity theft. Lau Beckman also faces an obstruction charge. They were married in October 2023. A lawyer for Beckman did not respond to requests for comment, and it remains unclear if the same attorney represents Lau Beckman. The U.S. Securities and Exchange Commission has filed related civil charges against both individuals.

Prosecutors allege Beckman fabricated financial documents, including bank statements and audit reports, some of which falsely appeared to come from PwC, a prominent accounting firm. He’s also accused of inventing tens of millions in revenue, inflating cash balances, and faking customer relationships. To sustain the ruse, Beckman allegedly impersonated at least seven individuals in written communications.

Authorities claim Lau Beckman assisted by providing her husband with legitimate audit reports that he then altered. When the grand jury began investigating, she allegedly attempted to delete hundreds of GameOn-related files from her employer’s records.

The couple reportedly spent $4.2 million of investor funds on personal expenses, including a San Francisco home, private school tuition, luxury cars, and their wedding venue. The scheme unraveled after Beckman stepped down as CEO on July 1, 2024. Ten days later, GameOn disclosed that its financial statements were fraudulent and laid off nearly all its employees, according to the SEC.

GameOn, founded in 2014, marketed itself as a leading provider of enterprise-grade conversational AI, boasting clients in professional sports and fashion. It has since rebranded as On Platform, which was not charged in connection with the case.

In a statement, First Assistant U.S. Attorney Patrick Robbins emphasized the importance of integrity in innovation, saying, “The Bay Area is home to incredible innovation and hard-working entrepreneurs, but innovation cannot grow through fraud.”

On Platform has not responded to requests for comment.