Feds, SEC Charge App Maker with Fraud, Say 'AI' Service Was Actually Run by Philippine Workers

In a stunning case that underscores growing concerns over AI hype and tech industry accountability, U.S. federal authorities have charged the founder of a so-called AI startup with fraud, alleging the company’s product was powered not by artificial intelligence, but by low-wage workers in the Philippines.

Albert Saniger, founder and former CEO of Nate, an e-commerce startup once marketed as an AI-powered universal shopping app, faces criminal charges for securities fraud and wire fraud, according to a statement issued by the U.S. Department of Justice on April 9. In a parallel action, the Securities and Exchange Commission (SEC) has filed a civil lawsuit.

Saniger, based in Barcelona, Spain, allegedly misled investors by promoting Nate as an advanced, AI-driven solution capable of automatically completing online retail transactions—such as filling in user details and finalizing purchases—without any human input.

But court documents paint a very different picture.

According to the Justice Department, behind the scenes, Nate employed “hundreds of contractors, or ‘purchasing assistants,’ in a call center located in the Philippines” to manually handle those transactions. Authorities say the app had “effectively zero” automation capabilities despite public claims and investor pitches to the contrary.

Source: US Attorney's Office, Southern District of New York

“Saniger exploited the promise and allure of AI technology to build a false narrative about innovation that never existed,” said Acting U.S. Attorney Matthew Podolsky for the Southern District of New York. “This type of deception not only victimizes innocent investors, it diverts capital from legitimate startups and impedes real progress in AI development.”

From 2020 to 2022, Saniger allegedly raised more than $40 million from venture capital firms, all based on the misrepresentation that Nate was powered by proprietary AI. Internally, employees were allegedly instructed to conceal the role of human workers in facilitating transactions.

While Nate did acquire some AI-related technology from a third-party vendor and had a team of data scientists on staff, the app reportedly never achieved consistent automation. In late 2021, during a busy holiday shopping season, Saniger allegedly ordered the engineering team to develop bots to assist with transactions—still falling far short of true automation.

The app ceased operations in January 2023 after media scrutiny began to raise doubts about its technology. At that time, Saniger reportedly laid off the entire staff.

If convicted, Saniger faces up to 20 years in prison for each of the charges. The SEC is also seeking to permanently bar him from serving as an officer or director of a public company and to return investor funds.

Nate has not responded to requests for comment. Legal representation for Saniger has not yet been confirmed.