Tech CEO indicted for faking AI to secure $40M in funding

Albert Saniger, former CEO of Nate, Inc., allegedly deceived investors by making false claims about automation, while relying on manual labor to mimic AI capabilities

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Albert Saniger, former CEO of Nate, Inc., has been indicted for allegedly defrauding investors by falsely claiming his e-commerce app used proprietary artificial intelligence to automate online purchases.

Here are a few key points:

• Prosecutors say Saniger misled investors from 2018 onward by portraying the app as AI-driven, when in fact transactions were manually processed by overseas workers, primarily in the Philippines.

• The company reportedly had a near-zero automation rate, despite public claims of advanced AI functionality.

• Saniger raised over $40 million from investors based on these false claims. Internally, he concealed the truth by limiting access to automation metrics and telling employees the data was a “trade secret.”

• Saniger is charged with securities fraud and wire fraud, each carrying a maximum sentence of 20 years.

• The FBI and the SEC are involved in the investigation, with the latter also filing a civil case.

• Authorities say the scheme undermines trust in legitimate AI innovation and harms the investment ecosystem.

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