The CEO of several East Bay-based Internet companies marketing child-friendly services has been indicted and arrested by federal investigators for alleged wire and securities fraud violations.
Alan Anderson, 59, of Walnut Creek faces charges he used false and fraudulent pretenses to induce investors to make contributions to three businesses marketed as providing child-friendly internet services, announced Acting United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.
According to the indictment, Anderson owned and controlled Imbee, Inc., a Delaware corporation based in Walnut Creek marketed as a child-friendly social media platform; Fanlala, a California corporation marketed as a service providing internet-based music streaming for children; and Fruit Punch, a California corporation marketed as providing music-streaming service for children. The indictment alleges that beginning as early as April of 2010 through May of 2019, Anderson raised money for his companies by making false representations and creating false documents to support his bogus claims.
Investigators allege Anderson created fraudulent income statements and profit and loss statements and misrepresented the companies’ profitability to investors and potential investors; that Anderson created and altered contracts to represent falsely that one or more of his companies would be acquired by larger companies; and that Anderson created and altered contracts to make fraudulent claims that his companies created partnerships with other existing companies. In addition, the indictment describes how Anderson emailed an investor to falsely claim Imbee was worth $21.6 million and that the investor owned 70% of the company.
Anderson faces four counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of securities fraud, in violation of 15 U.S.C. §§ 78j(b) & 78ff and 17 C.F.R. 240.10b-5. Anderson was arrested earlier this week in Walnut Creek.
If convicted, each count of wire fraud carries a maximum sentence of 20 years in prison and a maximum $250,000 fine. The securities fraud charge carries a maximum 20 years of imprisonment and a $5,000,000 fine. In addition, the court also may order a term of supervised release, fines or other assessments, and restitution, if appropriate.