{"id":31461,"date":"2025-04-11T08:55:21","date_gmt":"2025-04-11T08:55:21","guid":{"rendered":"https:\/\/coincentral.com\/?p=31461"},"modified":"2025-04-11T08:55:21","modified_gmt":"2025-04-11T08:55:21","slug":"former-nate-ceo-charged-with-fraud-ai-shopping-app-actually-powered-by-humans","status":"publish","type":"post","link":"https:\/\/coincentral.com\/former-nate-ceo-charged-with-fraud-ai-shopping-app-actually-powered-by-humans\/","title":{"rendered":"Former Nate CEO Charged with Fraud: &#8216;AI&#8217; Shopping App Actually Powered by Humans"},"content":{"rendered":"<h1>TLDR<\/h1>\n<ul>\n<li>Albert Saniger charged with fraud for falsely marketing Nate app as AI-powered<\/li>\n<li>The app actually used human workers in the Philippines to complete online purchases<\/li>\n<li>Saniger raised over $40 million from investors based on false AI claims<\/li>\n<li>The app&#8217;s actual automation rate was &#8220;effectively zero percent&#8221; according to authorities<\/li>\n<li>Nate ceased operations in January 2023 after media scrutiny<\/li>\n<\/ul>\n<hr \/>\n<p>The founder and former CEO of e-commerce app Nate <a href=\"https:\/\/www.justice.gov\/usao-sdny\/pr\/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme\">has been charged with fraud by U.S. authorities.<\/a> Albert Saniger, 35, of Barcelona, Spain, allegedly misled investors by claiming his shopping app used artificial intelligence <a href=\"https:\/\/techcrunch.com\/2025\/04\/10\/fintech-founder-charged-with-fraud-after-ai-shopping-app-found-to-be-powered-by-humans-in-the-philippines\/\">when it was actually powered by human workers in the Philippines.<\/a><\/p>\n<p>The Justice Department and Securities and Exchange Commission (SEC) filed charges on April 9, 2025. Saniger faces one count of securities fraud and one count of wire fraud, each carrying a maximum sentence of 20 years in prison.<\/p>\n<p>Founded around 2018, <a href=\"https:\/\/www.nate.tech\/\">Nate was marketed as an AI-powered universal shopping cart<\/a> that allowed users to complete online purchases with a single tap. The app promised to handle all checkout steps automatically, including entering shipping details and sizing information.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Tech CEO charged in artificial intelligence investment fraud scheme<a href=\"https:\/\/t.co\/UyoYN6lrtN\">https:\/\/t.co\/UyoYN6lrtN<\/a><\/p>\n<p>&mdash; US Attorney SDNY (@SDNYnews) <a href=\"https:\/\/twitter.com\/SDNYnews\/status\/1910079478660845653?ref_src=twsrc%5Etfw\">April 9, 2025<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<h2>Human Workers, Not AI<\/h2>\n<p>According to court documents, the reality was very different. Instead of using AI, Saniger employed &#8220;hundreds of contractors, or &#8216;purchasing assistants,&#8217; in a call center located in the Philippines to manually complete purchases occurring over the nate app.&#8221;<\/p>\n<p>While Saniger had acquired some AI technology from a third party and hired data scientists to develop it, authorities claim the app never achieved the ability to consistently complete e-commerce purchases. The app&#8217;s actual automation rate was &#8220;effectively zero percent,&#8221; according to the indictment.<\/p>\n<p>Saniger allegedly went to great lengths to hide this fact. He told employees to keep the automation rate secret, restricted access to the company&#8217;s &#8220;automation rate dashboard,&#8221; and provided false explanations for his secrecy, claiming the automation data was a &#8220;trade secret.&#8221;<\/p>\n<h2>Millions Raised on False Claims<\/h2>\n<p>Under the guise of investing in an AI-powered app, Saniger solicited more than $40 million from venture capital firms. Some reports indicate the total funding may have reached $50 million, with investors including Coatue, Forerunner Ventures, and Renegade Partners.<\/p>\n<p>Acting U.S. Attorney for New York Matthew Podolsky alleged Saniger duped investors by &#8220;exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed.&#8221;<\/p>\n<p>During the busy holiday season in 2021, Saniger reportedly directed Nate&#8217;s engineering team to develop bots to automate some transactions, working alongside the human workers. This decision came despite his previous statements to investors that the company did not use &#8220;dumb bots.&#8221;<\/p>\n<h2>Company Collapse<\/h2>\n<p>Nate&#8217;s practices came under scrutiny following a 2022 investigation by The Information that revealed the company&#8217;s heavy usage of human contractors. According to the DOJ, Nate ran out of money and was forced to sell its assets in January 2023, leaving investors with &#8220;near total&#8221; losses.<\/p>\n<p>Saniger terminated all of Nate&#8217;s employees after media reports began casting doubt on the app&#8217;s capabilities. His LinkedIn profile indicates he was no longer CEO as of 2023. He is currently listed as a managing partner at New York VC Buttercore Partners.<\/p>\n<p>The SEC&#8217;s civil action seeks to ban Saniger from holding office in any similar company and return investor funds. FBI Assistant Director in Charge Christopher G. Raia said, &#8220;Saniger allegedly abused the integrity associated with his former position as the CEO to perpetuate a scheme filled with smoke and mirrors.&#8221;<\/p>\n<p>The case is being handled by the Office&#8217;s Securities and Commodities Fraud Task Force and the Complex Frauds and Cybercrime Unit.<\/p>\n<p>Nate is not the only startup accused of exaggerating AI capabilities. Other companies, including an &#8220;AI&#8221; drive-through software startup and legal tech unicorn EvenUp, have also reportedly used humans to do much of the work claimed to be done by artificial intelligence.<\/p>\n<p>The charges against Saniger highlight growing concerns about misrepresentation in the tech sector, particularly around artificial intelligence claims, as investors pour money into the booming AI space.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>TLDR Albert Saniger charged with fraud for falsely marketing Nate app as AI-powered The app actually used human workers in the Philippines to complete online purchases Saniger raised over $40 million from investors based on false AI claims The app&#8217;s actual automation rate was &#8220;effectively zero percent&#8221; according to authorities Nate ceased operations in January<\/p>\n","protected":false},"author":9001,"featured_media":31462,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"iawp_total_views":57,"footnotes":""},"categories":[28154,28171],"tags":[],"class_list":{"0":"post-31461","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ai","8":"category-crime"},"wppr_data":{"cwp_meta_box_check":"No"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Former Nate CEO Charged with Fraud: &#039;AI&#039; 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