Albert Saniger, the former CEO of Nate, Inc., is facing serious legal trouble after being accused of lying to investors about the company’s use of artificial intelligence (AI). Saniger, who founded Nate in 2018, told investors and the public that his app could use AI to help people shop online in just one tap. His app, the Nate app, was described as a “universal shopping cart.” The big idea? You find an item online, click “buy” in the Nate app, and the app does the rest — choosing the size, filling in your information, and completing the purchase.
Saniger claimed all of this happened using powerful, smart AI — like a robot assistant doing your shopping for you. He promised that the Nate app could finish transactions on all kinds of shopping websites without any human help. This special feature, he said, made Nate different from every other online shopping tool.
Because of these claims, Saniger was able to convince multiple venture capital firms to invest more than $40 million into the company. He showed them pitch materials, told stories about how advanced the app’s AI was, and explained that only in very rare cases — the “edge cases” — would a human need to step in. He insisted that his technology was the real deal, and that it worked almost entirely on its own.
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The Shocking Truth Behind the Scenes
But according to an indictment announced by the U.S. Attorney’s Office and the FBI, none of those claims were true.
In reality, the Nate app didn’t use smart AI to complete purchases. Behind the scenes, the process wasn’t high-tech at all. Instead of a robot assistant, it was real people — mostly workers in the Philippines — who were handling the shopping process manually. These workers were called “purchasing assistants,” and they would secretly fill in the forms, enter the details, and click the buttons that the AI was supposed to be doing.
The real automation rate, or how often the AI actually worked as promised, was close to zero percent. Saniger knew this, the indictment says. But he told employees to keep it secret. He limited who could see the company’s dashboard that showed how poorly the AI was performing. When people asked questions, he claimed the data was a “trade secret” and could not be shared.
Even though Nate had hired data scientists and bought some AI technology from another company, it never got the AI to work the way Saniger promised. Instead of telling investors the truth, he kept up the illusion. And when the busy 2021 holiday season came around, Saniger even asked his engineers to build simple “bots” — computer programs that could do very basic tasks. Still, most purchases continued to be done by humans pretending to be AI.
This trickery allowed Nate to keep up the appearance of being a cutting-edge tech company while raising millions of dollars based on lies.
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Criminal Charges and Legal Action
Now, Albert Saniger, 35, of Barcelona, Spain, is facing serious consequences. He has been charged with one count of securities fraud and one count of wire fraud. Each charge carries a maximum prison sentence of 20 years. These are only accusations for now, and under U.S. law, Saniger is considered innocent until proven guilty in court.
The charges were announced by Matthew Podolsky, Acting U.S. Attorney for the Southern District of New York, along with Christopher G. Raia, Assistant Director in Charge of the FBI’s New York Field Office. The U.S. Securities and Exchange Commission (SEC) has also filed a separate civil case against Saniger.
Podolsky stated that this kind of fraud is especially harmful. It takes money away from real innovators, makes investors wary of supporting new technologies, and slows down the real progress of AI. He said that his office, along with the FBI, will continue to go after those who use fake tech stories to trick investors.
The case is being handled by the U.S. Attorney’s Securities and Commodities Fraud Task Force and the Complex Frauds and Cybercrime Unit. Three Assistant U.S. Attorneys are leading the prosecution: Nicholas W. Chiuchiolo, Alexandra Messiter, and Sarah Mortazavi.
As of now, the case is ongoing and more details may emerge as the legal process continues.
