Former Nate CEO Faces Fraud Charges After $40M Investment Based on False AI Claims

TLDR

• Albert Saniger, founder of Nate app, charged with securities and wire fraud by US authorities
• App marketed as AI-powered shopping tool but actually used human workers in Philippines to process transactions
• Saniger raised over $40 million from investors while claiming app could complete purchases “without human intervention”
• Automation rate was “effectively zero percent” despite claims of proprietary AI technology
• Nate ceased operations in January 2023 after media reports questioned the app’s capabilities

Albert Saniger, founder and former CEO of e-commerce app Nate, has been charged with securities and wire fraud by US authorities. Federal prosecutors allege Saniger deceived investors by falsely marketing his shopping app as powered by artificial intelligence when it actually relied on human workers in the Philippines.

The Justice Department and Securities and Exchange Commission filed parallel actions against Saniger on April 9, 2025. Court documents show Saniger, 35, from Barcelona, Spain, founded Nate around 2018 and launched the app in July 2020.

Saniger marketed Nate as an AI-powered universal shopping cart that could complete online retail transactions automatically. The app promised to handle all checkout details including shipping information and sizing without human input.

Human Workers, Not AI

However, authorities claim the reality was very different. “Saniger used hundreds of contractors, or ‘purchasing assistants,’ in a call center located in the Philippines to manually complete purchases occurring over the nate app,” according to the Justice Department.

Tech CEO charged in artificial intelligence investment fraud schemehttps://t.co/UyoYN6lrtN

— US Attorney SDNY (@SDNYnews) April 9, 2025

Acting US Attorney for New York Matthew Podolsky said Saniger “exploited the promise and allure of AI technology to build a false narrative about innovation that never existed.” The deception allegedly helped Saniger raise more than $40 million from venture capital firms.

The company did acquire AI technology from a third party and employed data scientists to develop it. But authorities claim the app never achieved the ability to consistently complete e-commerce purchases.

According to court documents, the app’s actual automation rate was “effectively zero percent.” Saniger allegedly instructed employees to keep this rate secret and restricted access to the company’s “automation rate dashboard.”

Cover-Up Allegations

During the busy 2021 holiday shopping season, Saniger reportedly directed Nate’s engineering team to develop bots to automate some transactions. These bots worked alongside human workers to create the illusion of AI-powered automation.

Saniger allegedly told employees to hide the true source of Nate’s operations. Most employees were kept in the dark about how the app actually functioned.

The fraud charges came after The Information published an investigation in 2022 questioning Nate’s AI claims. The DOJ indictment states that Nate ran out of money and sold its assets in January 2023, leaving investors with “near total” losses.

Similar Cases Emerging

Nate isn’t the only tech company accused of exaggerating AI capabilities. The Verge reported in 2023 that an “AI” drive-through software startup was also powered largely by humans in the Philippines.

Business Insider recently revealed that EvenUp, an AI legal tech unicorn, used humans to perform much of its work while claiming to use advanced automation.

Each fraud charge against Saniger carries a maximum sentence of 20 years in prison. The SEC is also seeking to ban Saniger from holding office in any similar company and return investor funds.

Nate ceased operations in January 2023, and Saniger terminated all employees after media reports cast doubt on the app’s capabilities. Saniger’s LinkedIn profile indicates he left his CEO position at Nate in 2023.

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 Complex Frauds and Cybercrime Unit.

Saniger is currently listed as a managing partner at New York VC Buttercore Partners. Neither Saniger nor Buttercore Partners responded to requests for comment about the charges.