SEC and DOJ Charge Tech CEO Albert Saniger Over $42 Million "Nate" AI-Washing Fraud

In parallel civil and criminal actions filed on April 9, 2025, the U.S. Attorney for the Southern District of New York (SDNY) and the Securities and Exchange Commission (SEC) charged Albert Saniger (Alberto Saniger Mantinan), the founder and former CEO of e-commerce startup Nate, Inc., with securities fraud and wire fraud. The government alleges Saniger defrauded venture capital investors of over $42 million by fabricating his company's artificial intelligence capabilities.

Nate, Inc., founded in 2018, marketed a mobile shopping application called "Nate" that was touted as a universal, fully automated shopping cart. Saniger represented to investors that the app used advanced generative AI and machine learning to "skip the checkout" and complete online retail purchases with a single tap, without human intervention.

In reality, the government alleges that Nate's AI technology never functioned as advertised. At the time Saniger claimed the app was fully automated, its actual automation rate was near zero percent. Instead of using AI, Saniger secretly employed hundreds of manual contract workers in a call center in the Philippines to process transactions in real time behind the scenes, mimicking technological automation. Furthermore, during investor presentations, Nate engineers allegedly worked frantically in the background to manually push orders through to sustain the illusion of AI-driven checkout.

In its press release, the SDNY quoted the FBI and prosecutors describing the scheme:

"Saniger misled investors by exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed. ... [He] defrauded investors with fabrications of his company's purported artificial intelligence capabilities while covertly employing personnel to satisfy the illusion of technological automation ... a scheme filled with smoke and mirrors."

The legal filings detail the following:

• Criminal Charges: The SDNY grand jury indicted Saniger on two counts: securities fraud under Section 10(b) and Rule 10b-5 of the Exchange Act, and wire fraud. The indictment seeks criminal conviction and asset forfeiture.
• Civil Charges: The SEC's civil complaint, filed in the Southern District of New York, alleges violations of Section 10(b) of the Exchange Act and Section 17(a) of the Securities Act. The SEC seeks an officer and director bar, disgorgement of ill-gotten gains (including $3 million Saniger personally pocketed by selling his own shares), and civil penalties.
• Outcome/Status: Nate, Inc. ceased operations in January 2023 and dissolved via an Assignment for the Benefit of Creditors, leaving investors with tens of millions of dollars in losses. The SEC complaint noted that they had struggled to serve Saniger with the complaint as he resides in Spain.

This landmark case demonstrates that federal securities laws apply with full force to private venture-backed startups and that regulators will aggressively prosecute "smoke and mirrors" AI representations made during fundraising rounds.