The Indictment of Albert Saniger: A Case of Misleading Investors
April 12, 2025 / 6:02 PM EDT / CBS News
A fintech startup that raised $40 million based on the promise of advanced artificial intelligence capabilities has found itself in a legal predicament. The U.S. federal prosecutors announced this week that the company misled investors by utilizing human labor rather than AI technology, which allegedly resulted in significant financial losses for those who invested in it.
Albert Saniger, 35, the former CEO and founder of Nate, was indicted in the Southern District of New York. The indictment claims Saniger, who launched the startup in 2018, made false statements regarding the abilities of his company’s AI technology. Instead of using AI as promised, Nate relied significantly on overseas workers who manually processed transactions, despite claims of automated systems.
How the Deception Unraveled
Nate’s app was intended to streamline online shopping processes through a single AI-powered tap option. However, documents reveal that this app was far from the advanced technology that it was marketed as. Saniger raised over $40 million with the promise of custom-built deep learning models, boasting that the app could complete 10,000 daily transactions.
Behind the scenes, the app utilized workers based in the Philippines and Romania, who carried out tasks manually. This systemic deception provided a facade of a high-performing automated system which investors believed they were funding. The Justice Department’s statement highlighted, ‘Saniger allegedly abused the integrity associated with his former position as the CEO to perpetuate a scheme filled with smoke and mirrors.’
Impact on Investors and Market Trends
The company’s downfall in 2023 resulted in substantial losses for investors who had been drawn in by the promise of innovative technology. The rise of AI investments in the U.S. has skyrocketed, reportedly reaching $109.1 billion in the previous year, with projections to hit $4.8 trillion by 2033. Despite the rapid growth in AI, as shown in this case, the industry is not free from unethical practices that exploit cheap labor under the guise of technological advancements.
Concerns arise from cases such as Nate’s where the marketing of AI technology conceals a reliance on human operations, complicating the perception of AI’s role in modern business practices.
For more information, view the full indictment here.
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