So You Want to Be an AI Millionaire?
January 27, 2025
A blog post from an authentic dinobaby. He’s old; he’s in the sticks; and he is deeply skeptical.
The US Attorney in the Northern District of California issued a remarkable public statement about an AI investor scheme that did not work. The write up states:
A 25-count indictment was unsealed today charging Alexander Charles Beckman, the founder and former CEO of GameOn, Inc., also known as GameOn Technology or ON Platform (“GameOn”), and Valerie Lau Beckman (“Lau”), an attorney who worked on GameOn matters and is married to Beckman, with conspiracy, wire fraud, securities fraud, identity theft, and other offenses. Lau was also charged with obstruction of justice. According to the indictment filed on Jan. 21, 2025, Beckman, 41, and Lau, 38, both of San Francisco, allegedly conspired to defraud GameOn investors, GameOn, and a bank.
I want to point out that this type of fraud is a glimpse of the interesting world of the Silicon Valley FOMO or fear of missing out. Writing checks based on a PowerPoint deck is a variation of playing roulette, just with money not a casino with no clocks.
However, in the official statement, there was some fascinating information about the specific method used by the individuals involved in the scam. The public document says:
As alleged in the indictment, Beckman’s statements to GameOn investors often described non-existent revenue, inflated cash balances, and fake and otherwise 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 GameOn financial and business information and documents with the intent to defraud GameOn and its investors. Among the individuals whose names Beckman used to commit the fraud scheme was a GameOn CFO, two bank employees, and an employee of a major professional sports league. 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 over a dozen fake bank statements for GameOn’s accounts as part of the scheme.
Building a financial crime is hard, detailed work. Here’s the twist used by those in the US Attorney’s news release:
After changing law firms multiple times, Lau joined a venture capital firm in September 2021. Lau is alleged to have provided Beckman with genuine audit reports that she obtained from her own employer that Beckman then used to create fake audit reports for GameOn. The indictment alleges that Lau personally emailed one of these fake audit reports to a GameOn investor’s representative, knowing it to be fake, to induce further investment into the company. In June 2024, Lau furthered the scheme to defraud by delivering a fake GameOn account statement—one that she knew falsely listed GameOn’s balance at a certain financial institution as over $13 million when the company’s true balance was just $25.93—to a bank branch in San Francisco and asking a bank employee to keep the fake statement in an envelope at the bank for Beckman to pick up later that day. Lau knew that Beckman planned to pick up the fake statement with a GameOn director who represented a major investor on GameOn’s board. Beckman picked up the fake statement with the GameOn director that day.
Several observations:
- Bad actors in this case did a great deal of work. Imagine the benefit of applying those talents to a non-fraudulent activity.
- The FOMO lure generates a pool of suckers for get rich quick schemes.
- The difference between a “real” AI play and one that is little more than a vehicle for big bucks resides on a fine line subject to Heisenberg’s uncertainty principle. Some crazy AI schemes get lucky and become “real” businesses. Everyone is surprised.
The clever work may be rewarded with new career opportunities for those involved.
Stephen E Arnold, January 27, 2025
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