The US Department of Justice is pursuing criminal charges against Albert Saniger, the former CEO of nate, for allegedly defrauding investors out of $40 million.
Nate was an artificial intelligence firm that claimed to have proprietary technology while employing real people to do the work.
FBI Assistant Director in Charge Christopher G. Raia explained that Saniger defrauded investors by fabricating his tech while “covertly” employing people to create an illusion of automation. Raia claims the scheme was “filled with smoke and mirrors.”
The indictment states that Saniger founded his e-commerce company around 2018 and marketed the service as a universal shopping cart app with his tech completing the purchase process for the consumer.
The single defining feature of Nate is described as:
“…the ability to intelligently and quickly complete retail transactions across all e-commerce sites through the use of AI technology.”
The reality was said to be far different as Saniger hired hundreds of contractors, in a call center in the Philippines, to manually complete the purchase.
The wheels fell off of the scheme when a trade journal reported in 2022 that nate was employing low cost workers in the Philippines. Even after this was disclosed, Saniger allegedly told investors they only depended on humans for payment risk, training, data labeling and purchase completion for certain edge cases. In actuality, no AI bots were utilized.
Saniger apparently raised over $40 million from multiple investors based on his representations to investors about nate’s usage of AI.
Saniger, from Barcelona, Spain, is being charged with securities fraud and wire fraud. He now faces a maximum sentence of 20 years in prison for each charge.
