Federal prosecutors have charged Albert Saniger, 35, the founder and former CEO of fintech startup Nate, with defrauding investors by falsely claiming his company’s app used cutting-edge artificial intelligence. In reality, the supposedly AI-powered e-commerce tool relied on a hidden team of human workers based overseas to manually complete tasks users believed were automated.
Saniger allegedly raised over $40 million by promoting Nate as an AI-driven app that could streamline online shopping with a single tap. He claimed the platform used custom deep learning models to instantly purchase items, but behind the scenes, workers in the Philippines and Romania were processing these transactions manually. According to the indictment, Saniger instructed employees to keep the human labor a secret while pitching the app as a breakthrough in automation.
When a typhoon hit the Philippines in 2021 and disrupted operations, Nate quietly shifted its manual processing center to Romania to maintain performance, especially for investor-related activity. Authorities say Saniger prioritized these transactions to avoid raising suspicion. Nate collapsed in 2023, leaving investors with nearly total losses.
This case sheds light on a broader issue in the AI industry, where companies have reportedly leaned on low-cost labor to simulate automation. It also highlights the growing pressure on startups to deliver on AI hype amid skyrocketing investment in the sector.
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