A luxurious lifestyle at the expense of investors has landed an AI startup founder in jail. The prosecutor in San Francisco, California, accuses founder Alex Beckman and his lawyer, now his wife, of defrauding investors of more than 60 million US dollars. This case highlights how the hype around Artificial Intelligence can make investors vulnerable to fraud. Beckman allegedly claimed to have over 13 million dollars in bank accounts when the balance was actually less than 26 dollars. Given the accusations and the company’s actual financial situation, it seems unlikely that the defrauded investors will ever get their money back.
The startup, On Platform, formerly known as Gameon Technology, claimed to be a “leading enterprise platform for AI-powered conversational systems trusted by top brands in retail, sports, and media.” However, these claims were unfounded. The US Securities and Exchange Commission (SEC) accuses Beckman of deceiving investors with fake revenue reports, claiming millions in recurring income from deals with major clients like the NBA, NHL, and Coca-Cola.
In reality, GameOn generated little to no revenue from these alleged top clients and instead paid high fees to use their brand content. The SEC documents state, “GameOn’s annual revenue never exceeded 500,000 dollars, the company was never profitable, and lost millions each year.” Beckman repeatedly presented investors with fake financial statements showing millions in liquid assets, while the actual balance was often close to zero.
The scandal began in July 2024 when On had to lay off all 50 employees. It was discovered that 11 million dollars in cash were missing from a bank account, leading to Beckman’s resignation. The remaining executives informed shareholders that the actual bank balance was only 37 cents. This discovery plunged the company into a liquidity crisis, forcing the board and management to act swiftly to avoid bankruptcy.
Initially, Beckman denied the allegations. However, investigators have proven that he and his wife spent 4.2 million dollars on two properties in San Francisco. The couple now faces long prison sentences, and their luxurious lifestyle at the investors’ expense is likely over.
