A US tech founder is facing fraud charges after claims that his company’s artificial intelligence (AI) was actually people working from a call center in the Philippines.
Albert Saniger, the 35-year-old behind a shopping app called nate, is accused of lying to investors about how the app worked.
Saniger raised over $40 million by saying nate used its own AI system to complete online purchases. He told backers that the app could pick the right product size, fill in payment and shipping details, and place orders with just one tap from the user—no human help needed.
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The app was launched around 2018 and marketed as a simple way to buy things from any online store. Users were led to believe that smart software handled every step of the checkout process.
In reality, the AI struggled to complete most orders. Instead of fixing the system, nate quietly hired people in the Philippines to do the work. These workers would complete each transaction manually, pretending to be the app’s automation.
Saniger has been charged with securities fraud and wire fraud. Each charge could carry up to 20 years in prison if he is found guilty. The US Securities and Exchange Commission (SEC) has also filed a civil complaint against him.
Acting US Attorney Matthew Podolsky said, “Albert Saniger misled investors by exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed”.
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