A co-founder of the fintech Aspiration Partners faces up to 40 years in prison after pleading guilty to two charges of wire fraud, the Justice Department announced last week.
Aspiration co-founder Joe Sanberg’s actions fleeced $248 million from investors and lenders, the DOJ said.
Sanberg and fellow board member Ibrahim AlHusseini promised shares of Sanberg’s stock in the fintech to two lenders to obtain $145 million in loans in 2020 and 2021, the DOJ said. The two board members falsified bank and brokerage statements to inflate AlHusseini’s assets by tens of millions of dollars to secure the loans, the department said.
Further, Sanberg – it appeared – recruited companies and individual investors to sign letters of intent with Aspiration in which they pledged tens of thousands of dollars per month for tree planting services, the DOJ said, citing court documents. Sanberg, however, concealed that these payments came from Sanberg rather than from the customers, the DOJ said, adding that the co-founder instructed employees not to contact the customers.
The fintech booked revenue from Sanberg’s customers from March 2021 to November 2022, but Sanberg did not disclose that he was the source of the payments, the DOJ said.
That falsely inflated the revenue in Aspiration’s financial statements, the department asserted. Aspiration filed for Chapter 11 bankruptcy in March.
Sanberg also misstated Aspiration’s financial condition in materials, including a fabricated letter from the fintech’s audit committee indicating the company had $250 million in available cash and equivalents when Aspiration counted less than $1 million in available cash, the DOJ said.
“This so-called ‘anti-poverty’ activist has admitted to being nothing more than a self-serving fraudster, by seeking to enrich himself by defrauding lenders and investors out of hundreds of millions of dollars,” Bill Essayli, acting U.S. attorney for the Central District of California, said in a statement Aug. 21.
Aspiration launched in 2013 as a neobank focused on sustainable and green investing. It had aimed to go public in 2021 through a special-purpose acquisition company merger that valued the company at $2.3 billion.
Sanberg’s fellow co-founder, Andrei Cherny, stepped down as CEO of Aspiration in 2022. The company cut more than 180 jobs in a restructuring the following year. Aspiration spun off its consumer financial services brand into a standalone company in 2024.
“The defendant didn’t just bend the truth, he built a business on a lie to boost the company’s value and line his own pockets,” Eric Shen, inspector in charge of the U.S. Postal Inspection Service Criminal Investigations Group, said in Thursday’s statement.
