The U.S. Department of Justice has charged Albert Saniger, the former CEO of Nate, a company that developed artificial intelligence for shopping. This project, launched in 2018, was marketed as a “magical app for online shopping,” but turned out to be a scam.
This is reported by Finway
Saniger faces up to 40 years in prison. According to the DOJ, the company raised about $51 million in investments, promising investors that a proprietary AI algorithm was at the core of the program. However, the department’s data indicates that the actual level of automation in the app was less than 1%.
“Although Saniger acquired AI technology from a third party and hired specialists to maintain its operation, Nate’s AI never achieved the promised functionality,” the U.S. Department of Justice stated.
Saniger concealed the true state of affairs from both investors and most of the company’s employees. Instead, he engaged contractors who processed orders manually, with hundreds of such workers operating in a call center in the Philippines. Additionally, the company used bots to automate processes.
The charges against Saniger include securities fraud and wire fraud. He left his position as CEO of Nate in 2023, after which the company was forced to sell off most of its assets to cover debts, but investors still suffered losses. Meanwhile, according to information on the official website, the project continues to operate.