Start-up founder—who siphoned millions from investors to enjoy lavish lifestyle—arrested
What's the story
Alexander and Valerie Beckman, a San Francisco couple, have been indicted on 25 federal charges in connection with their AI company, GameOn Inc.
The couple faces charges of wire and securities fraud, conspiracy, identity theft among others.
Alexander is the founder of GameOn (founded in 2014), an AI firm that creates chatbot software for professional sports leagues and luxury fashion brands. Valerie, an attorney, has been handling corporate matters for GameOn since 2016.
They were arrested on Thursday.
Fraud details
Beckmans accused of misappropriating investor funds
The Beckmans are accused of raising $60 million from investors over six years, with $4.2 million reportedly going toward personal expenses.
These expenses include San Francisco properties, private school fees, wedding costs, and a Tesla Model X with falcon wing doors.
The indictment further claims that the couple misled GameOn investors with fake revenue streams, inflated cash reserves, and "fake and otherwise exaggerated customer relationships."
The company also occasionally missed payroll or paid employees late, the indictment claims.
Identity misuse
Alexander charged with identity theft
Alexander is said to have used the identities of at least seven people without their consent, to spread false financial and business information about GameOn.
The identities misused include a GameOn CFO, two bank employees, and a professional sports league employee.
He is also accused of creating two fake audit reports for GameOn using the names and trademarks of popular accounting firms, including one purportedly from the "Big Four" company PwC.
Accomplice
Valerie's role in the alleged fraud
Valerie is accused of helping Alexander by giving him real audit reports from her employer, which he then used to create fake ones for GameOn.
She allegedly sent one of these fake audit reports to a GameOn investor's representative, knowing it was fake, to spur further investment.
The indictment also accuses her of lying to her employer about involvement with GameOn and trying to erase hundreds of files related to GameOn from her employer's records during a grand jury investigation.
Legal consequences
Potential penalties for the Beckmans if convicted
If found guilty, the Beckmans could face up to 20 years in federal prison for each count of wire and securities fraud.
Other charges include five years for securities fraud conspiracy, 30 years for each count of bank fraud conspiracy, 10 years for engaging in monetary transactions in property derived from unlawful activity, and two years for each count of aggravated identity theft.
Valerie also faces potential maximum sentence of 20 years in federal prison for alleged obstruction of justice.