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Fintech Founder Charged With Fraud After ‘AI’ Shopping App Found to Be Powered by Humans in the Philippines
The U.S. Department of Justice has filed charges against Albert Saniger, the founder and former CEO of Nate, a fintech company that raised over $50 million from investors including Coatue and Forerunner Ventures, for defrauding investors. The allegations suggest that Saniger deceived investors by claiming his AI-powered shopping app could complete online transactions without human intervention.
According to the indictment, Nate’s founders claimed that their app utilized artificial intelligence (AI) technology to facilitate seamless e-commerce experiences, with a minimal need for human oversight. However, an investigation has revealed that this was far from the truth. Instead, hundreds of human contractors in the Philippines were employed to manually complete transactions, rendering AI capabilities non-existent.
It is alleged that Saniger and his team misrepresented the true nature of their operation, stating that Nate’s technology enabled automation of online purchases without human intervention, except for edge cases where AI failed to accomplish a transaction. Contrary to these claims, it appears that no automation whatsoever was achieved through AI.
The DOJ alleges that Nate’s reliance on human contractors was uncovered by an earlier investigation by The Information in 2022. Saniger has not responded to requests for comment.
This development follows similar reports of fintech startups exaggerating their use of AI technology. For instance, a report from The Verge in 2023 highlighted the case of an ‘AI’ drive-through software startup that also relied heavily on human workers in the Philippines. More recently, Business Insider exposed the fact that an AI legal tech unicorn used humans to do much of its work.
Nate’s founder and former CEO has been charged with fraud, and his current position as a managing partner at New York VC Buttercore Partners is currently unclear given this development.
Source: https://techcrunch.com/2025/04/10/fintech-founder-charged-with-fraud-after-ai-shopping-app-found-to-be-powered-by-humans-in-the-philippines/
