A man has been arrested after blowing $60 million on luxury goods for an AI startup.
This was despite only actually having 37 cents to the company’s name.
The founder of the artificial intelligence startup was arrested last week after he was found to have blown millions of dollars of investors’ money.
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Alex Beckman, along with his wife Valerie Lau, spent the money on property, jewelry, a Tesla, private school education for his children, and even used it to hire a social club for his wedding.
Now, the couple have both been charged with conspiracies to commit wire, bank and securities fraud, and aggravated identity theft and obstruction of justice.
Both Beckman and Lau appeared in a San Francsio court last week.
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The founder of the startup, ON Platform, had allegedly lied to his investors about having $13 million in the bank, when in reality, he only had $25.93.
On to ON Platform’s website, it said: “ON is the industry leading enterprise-grade conversational AI platform, trusted by the world’s leading brands in retail, sports, and media & entertainment.”
Alarm bells were raised back in July last year when the firm made all of its staff redundant.
This came after it was discovered that $11 million of company money was missing.
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As a result, Beckman handed in his resignation and the company executives wrote a letter to their shareholders.
In the letter, it said: “To our shock and horror, we discovered that, in reality, the account balance in that bank was only 37 cents. This discovery left the company in a liquidity crisis, and the board and management were forced to act quickly, hoping to stave off bankruptcy.”
While Beckman initially denied the allegations against him, it was uncovered that he, along with Lau, had blown over $4 million on two houses in San Franscisco as well as spending money on his children’s private schooling.
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Now, Beckman is being accused of giving investors ‘fictitious customer revenue reports reflecting millions of dollars in recurring revenue from dozens of high-profile customers’.
The Securities and Exchange Commission said: “Beckman repeatedly provided investors with fictitious company balance sheets reflecting millions of dollars in cash when the true cash position was a tiny fraction of what was represented — and at times close to zero.”
Both Beckman and Lau are now facing some serious charges which could result in them giving up their homes and assets.