The startup, formerly known as GameOn Technology, was valued at over $260 million and claimed to provide AI-based customer service chat systems for sports teams like the New York Yankees and Sacramento Kings. However, Beckman resigned as CEO in July 2024 after the board discovered financial discrepancies, including a company account that had only $0.37 instead of $11 million. Prosecutors also allege that Lau Beckman submitted falsified financial statements to a bank. The couple was arrested and appeared in court, with federal prosecutors emphasizing the threat such fraudulent schemes pose to financial markets and investors.
Key takeaways:
- The founder of an AI chat startup allegedly misused over $4 million of investor funds for personal expenses, including buying a home and luxury cars.
- Alex Beckman and his wife Valerie Lau Beckman were charged with wire fraud, conspiracy to commit wire fraud, and securities fraud.
- The company, On, was valued at over $260 million but had significantly lower actual revenues, often less than $500,000 annually.
- Beckman resigned as CEO in July 2024 after the board discovered financial discrepancies, including a company account that had only $0.37 instead of $11 million.