Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, and Christopher G. Raia, the Assistant Director in Charge of the New York Field Office of the FBI, announced charges against Albert Saniger, the former Chief Executive Officer of Nate, Inc., for defrauding investors by falsely representing the company's use of AI technology.
"Albert Saniger misled investors by exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed," said Acting U.S. Attorney Matthew Podolsky. Saniger is accused of making false claims about Nate's operational capabilities and the extent of its AI technology, thereby securing investments based on misleading information.
Saniger founded Nate in 2018 as an e-commerce company with an app that purportedly allowed users to simplify online shopping with AI. The app was marketed as capable of completing transactions with a single tap by autonomously navigating checkouts and entering necessary information. Saniger claimed to investors that Nate used AI to handle these processes without human intervention.
However, investigations revealed that Nate's automation rate was nearly zero, and the company's claims about its AI capabilities were misleading. "This type of deception not only victimizes innocent investors, it diverts capital from legitimate startups, makes investors skeptical of real breakthroughs, and ultimately impedes the progress of AI development," Podolsky stated.
The indictment alleges Nate relied on overseas human workers to manually process transactions, while Saniger maintained secrecy about the app's actual functionalities. Despite securing more than $40 million from investors, it was discovered that Nate's transactions were completed manually or through bots developed later to aid the process.
Saniger, a resident of Barcelona, Spain, faces charges of securities fraud and wire fraud, each carrying a potential maximum sentence of 20 years. The charges remain accusations, and Saniger is presumed innocent until proven guilty.
Acknowledging the FBI's investigative efforts, Podolsky praised, "the outstanding investigative work" done and also recognized the U.S. Securities and Exchange Commission's involvement in the matter. The case is being prosecuted by Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Alexandra Messiter, and Sarah Mortazavi.
The charges, as outlined in the indictment, remain allegations and will be decided by a judge.
