TLDR
- Albert Saniger, founder of Nate, has been charged with fraud by US authorities for falsely claiming his app used AI when it actually employed humans in the Philippines
- Investors provided over $40 million based on the false AI automation claims
- The app’s actual automation rate was “effectively zero percent” despite being marketed as AI-powered
- Saniger faces up to 20 years in prison for both securities fraud and wire fraud charges
- The company ceased operations in January 2023 after media reports questioned the app’s capabilities
Albert Saniger, the founder and former CEO of e-commerce app Nate, has been charged with securities and wire fraud by US authorities. They allege that his supposedly AI-powered shopping tool was actually powered by hundreds of human workers in the Philippines who manually processed transactions.
The Justice Department and Securities and Exchange Commission filed charges against Saniger on April 9, claiming he misled investors and the public about his company’s technology. Saniger founded Nate around 2018 and launched the app in July 2020.
Tech CEO charged in artificial intelligence investment fraud schemehttps://t.co/UyoYN6lrtN
— US Attorney SDNY (@SDNYnews) April 9, 2025
The app was marketed as an AI-powered universal shopping cart that could complete online retail transactions without human input. Users could supposedly make purchases with a single tap, with the app handling all checkout details automatically.
The Reality Behind The AI Claims
Court documents tell a different story. According to US authorities, Saniger employed hundreds of contractors as “purchasing assistants” in a Philippine call center. These workers manually completed purchases that users believed were being handled by artificial intelligence.
The app’s actual automation rate was “effectively zero percent,” according to prosecutors. Despite this reality, Saniger allegedly told employees to keep the automation rate secret and restricted access to the company’s “automation rate dashboard.”
During a busy holiday season in 2021, Saniger reportedly directed Nate’s engineering team to develop bots to handle some transactions. This was in addition to the human workers who were secretly completing most of the purchases.
Acting US Attorney for New York Matthew Podolsky stated that Saniger “exploited the promise and allure of AI technology to build a false narrative about innovation that never existed.” The deception not only harmed investors but also diverted capital from legitimate startups.
Millions Raised Under False Pretenses
Saniger successfully raised more than $40 million from venture capital firms based on his claims about the app’s AI capabilities. In pitch materials, he stated that Nate was “able to transact online without human intervention.”
When potential investors conducted due diligence, Saniger repeatedly claimed that the app was fully automated with AI, except for certain “edge cases” where the technology failed. He allegedly went to great lengths to maintain this facade.
The company did acquire AI technology from a third party and hired data scientists to develop it. However, authorities claim the app never achieved the ability to consistently complete e-commerce purchases as promised.
News reports began questioning the app’s capabilities in late 2022. Nate ceased operations in January 2023, and Saniger terminated all employees shortly after.
Legal Consequences and Charges
Saniger now faces one count of securities fraud and one count of wire fraud. Each charge carries a maximum sentence of 20 years in prison.
The SEC has filed a parallel civil action seeking to ban Saniger from holding office in any similar company. They are also asking the courts to order the return of investor funds.
FBI Assistant Director Christopher Raia stated that Saniger “allegedly defrauded investors with fabrications of his company’s purported artificial intelligence capabilities while covertly employing personnel to satisfy the illusion of technological automation.”
The case is being handled by the Southern District of New York’s Securities and Commodities Fraud Task Force and the Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Nicholas Chiuchiolo, Alexandra Messiter, and Sarah Mortazavi are in charge of the prosecution.
Authorities stressed that the charges contained in the indictment are accusations, and Saniger is presumed innocent unless proven guilty. Information on Saniger’s legal representation was not immediately available.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
