Investors have been fleeced out of more than $500 million by scammers who claim to be promoting shares in Silicon Valley’s hottest corporations.
The AI gold rush has attracted a lot of grifters, who have used pretend gross sales reports, doctored bank statements or inflated share costs to dupe buyers chasing the next tech jackpot, according to federal prosecutors.
The feds have introduced fraud instances against pre-IPO investment platform Linqto, AI startup SKAEL and chatbot company GameOn. Former executives at the first two corporations have pleaded guilty; the founder of GameOn stays under indictment, awaiting trial.
Francine McKenna, a CPA who teaches accounting at Montclair State University, warns that corporations are “just saying whatever they want” to potential buyers to get them to spend. Courtesy of Francine McKenna
“This is the worst we’ve seen in the 40 years I’ve been auditing and observing the industry—companies just saying whatever they want, in particular in pre-IPO situations,” Francine McKenna, a CPA and former PricewaterhouseCoopers inner auditor who teaches accounting at Montclair State University, advised The Post.
The instances offer a warning as Anthropic prepares for a blockbuster IPO later this 12 months and OpenAI also pursues a itemizing — which would put the AI growth within attain of abnormal buyers.
San Jose-based Linqto made more than $450 million from over 13,000 clients by promising access to coveted non-public corporations such as Kraken and Ripple before they went public, but collapsed into chapter in July 2025, according to the federal case against them.
Manhattan’s Daniel Patrick Moynihan US Courthouse, pictured in 2020. Federal prosecutors say Linqto’s alleged pre-IPO fraud scheme drew more than $450 million from over 13,000 clients. Christopher Sadowski
Founder William Sarris allegedly imposed markups with a median of 60% — although some exceeded 200% — while telling clients they were paying “market” costs, prosecutors claimed.
Days before Linqto launched a pricing software in 2023, Sarris joked it would be “a little Wizard of Oz… don’t pay attention to that man behind the screen,” then added, “fake it till you make it, baby,” according to the indictment against him.
The company also allegedly manufactured shortage, telling clients choices were “sold out” when shares truly remained obtainable, feds claimed.
After a compliance memo, then-executive Joseph Endoso messaged Sarris: “I was starting to try on orange jerseys for size last night” — a reference to prison clothes, according to the indictment.
Linqto founder William Sarris allegedly imposed markups that sometimes exceeded 200% while telling clients they were paying “market” costs, prosecutors say. He denies wrongdoing. Linqto
Former Linqto CEO Joseph Endoso pleaded guilty to fraud prices on Aug. 27 and is cooperating with federal prosecutors.
Endoso, 66, who succeeded Sarris as CEO, pleaded guilty to fraud prices Aug. 27 and is cooperating with prosecutors. Sarris, 75, was arrested Sept. 2. His lawyer, Tim Treanor, insisted he “is innocent of these charges and intends to fight them.”
San Francisco startup SKAEL raised more than $40 million from buyers while promoting software program it called “digital employees.” Founder Baba Nadimpalli admitted inventing income from corporations that never subscribed to their providers and clients who had canceled, federal prosecutors charged.
He also provided bank information displaying buyer funds which never arrived. Nadimpalli pleaded guilty to securities and wire fraud in June 2025 and was sentenced that November to a 12 months and a day in prison.
In a separate SEC case against him, an Oct. 5 order saved proceedings on maintain while the company thought of a proposed settlement. The next submitting is due Dec. 18.
GameOn’s founder, Alexander Beckman, raised more than $60 million between 2018 and 2024, prosecutors say.
SKAEL founder Baba Nadimpalli was sentenced to a 12 months and a day in prison after admitting he misled buyers with false income figures and bank information. SKAEL/Indeed
GameOn founder Alexander Beckman is accused of raising more than $60 million through a fraud scheme involving pretend bank statements and solid audit reports. He is awaiting trial. GameOn Technology
He and his spouse, attorney Valerie Lau, allegedly spent more than $4 million in investor funds on San Francisco real estate, non-public colleges and a lavish wedding ceremony, pre the indictments against them, which also alleged Beckman solid audit reports bearing accounting corporations’ names and logos.
In June 2024, Lau allegedly delivered a pretend assertion displaying more than $13 million to a San Francisco bank department for Beckman to gather. The account truly held $26, prosecutors say.
Valerie Lau at a San Francisco bank in June 2024, in footage included in her indictment. Prosecutors say she delivered a pretend assertion displaying more than $13 million in an account that held about $26. U.S. Attorney’s Office
The couple were charged in a 25-count indictment in January 2025. Their case stays pending, with a jury trial scheduled for Sept. 13, 2027.
“Make it till you get caught. Ask for forgiveness, not permission. These are not new ideas,” McKenna defined of the tech rogues’ mindset.
What has modified, she notes, is people’s tolerance: “There is more of that behavior, and such behavior is more readily accepted as just part of doing business.”
The stakes are very high, but have been revised as the AI giants head toward Wall Street.
Anthropic is getting ready for a November IPO, but some buyers are discussing a valuation nearer to $1.5 trillion — down from roughly $2 trillion beforehand expected, Reuters reported.
Anthropic CEO Dario Amodei at the White House on Sept. 29, 2026. The Claude maker is getting ready for a blockbuster IPO as buyers scrutinize its funds. AP Photo/Alex Brandon
OpenAI lately advised buyers its annualized income was approaching $50 billion at the finish of September, about $20 billion below an earlier reported determine, the Financial Times reported.
These variety of large figures can be quoted by scammers, but they are merely forecasts.
McKenna urged potential buyers to be cautious of any non-public company for which they can’t access their audited accounts.
“If they’re that close to an IPO, they definitely have audited financial statements… The problem is that nobody is asking for them and they’re not showing them,” she said.
OpenAI CEO Sam Altman speaks at the company’s DevDay occasion in San Francisco on Sept. 29, 2026. OpenAI has warned buyers against unauthorized offers involving its shares. REUTERS
For instance, while it is price a lot on paper, a prospectus reviewed by Reuters confirmed Anthropic generated just $4.6 billion in income in 2025 and posted an working loss of more than $8 billion.
Both Anthropic and OpenAI have warned consumers about unauthorized stock offers. OpenAI says transfers of its stock which violate its restrictions will not be acknowledged and can “carry no economic value to you.” Anthropic has said stock gross sales without it’s board’s approval are void.
Neither company responded to requests for remark from The Post.
The SEC filed 456 actions in fiscal 2025, down from 583 a 12 months earlier. It initiated just 5 against public corporations and their subsidiaries in the first half of fiscal 2026 — the fewest for that period in at least 16 years, according to Cornerstone Research.
SEC Chairman Paul Atkins, pictured at Nasdaq on Dec. 2, 2025, has defended the company’s emphasis on the high quality of enforcement instances over their amount. Getty Images
SEC Chairman Paul Atkins has defended an emphasis on the high quality of instances over their amount.
For Linqto clients, the promise of tech’s next windfall has turned into a battle to extract any variety of worth from its chapter.
Customers believed they were shopping for shares of prime flight cutting edge corporations like SpaceX, lawyer John Deaton said in a class motion, “but that’s not what they were buying.”
“There’s an enormous hunger to get in on the next big thing,” McKenna said. “People want to hit the jackpot.”
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