A Walnut Creek man was sentenced to more than seven years in prison last week for defrauding investors out of more than $8 million to back his child-oriented internet companies over the course of a decade, according to federal authorities.
Alan Anderson, 61, pleaded guilty to two counts of wire fraud in January, according to a news release from United States Attorney Ismail J. Ramsey and Federal Bureau of Investigations Special Agent in Charge Robert K. Tripp. Anderson was originally indicted by a federal jury in 2021 on four counts of wire fraud and one count of securities fraud.
Anderson’s prosecution follows a multi-year investigation by the FBI, according to the press release.
Between April 2010 and May 2018, Anderson was the CEO and main shareholder for three Internet companies aimed toward children — Imbee.com, which was marketed as a child-friendly social media platform; Fanlala, a music streaming service aimed at children; and Fruit Punch, another music-streaming service marketed toward kids.
Imbee was incorporated in Delaware and based in Walnut Creek, while the two music services were incorporated in California, officials said.
Anderson persuaded individuals to invest in his companies on the false pretext that the firms were being purchased or expanding contracts with well-established companies, according to the release. Anderson further convinced his investors by sending them falsified documents, including contracts and purchase orders.
The falsified documents were sent “with the intent to deceive or cheat” his investors, officials said. He cost investors about $8.825 million.
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U.S. District Judge Edward M. Chen handed down Anderson’s sentence. Chen found during the trial that Anderson’s lies to investors began in September 2011 and that the scheme lasted for several years, according to the press release.
Anderson was also sentenced to three years of supervised release. The amount of restitution he will be expected to pay will be set in a hearing on October 10.
Anderson will begin serving his sentence on January 6, 2025.
