Feds, SEC charge app maker with fraud, saying ‘AI’ service was Philippine workers

US authorities have charged a tech app founder with fraud, alleging that his advertised artificial intelligence-powered e-commerce app actually relied on human workers in the Philippines.Albert Saniger of Barcelona, Spain, founder and former CEO of the company nate, was charged with one count of securities fraud and wire fraud, the Justice Department said in an April 9 statement, while the Securities and Exchange Commission filed a parallel civil action.Court documents said Saniger founded nate around 2018 and launched an app of the same name in July 2020, marketing it as an AI-powered universal shopping cart that offered users the ability to complete online retail transactions, including filling in shipping details and sizing, without human input.The Justice Department alleged that, in reality, “Saniger used hundreds of contractors, or ‘purchasing assistants,’ in a call center located in the Philippines to manually complete purchases occurring over the nate app.”Source: US Attorney's Office, Southern District of New YorkInvestors gave Saniger over $40 million, feds sayActing US Attorney for New York Matthew Podolsky alleged Saniger duped investors by “exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed.” Under the guise of investing in the AI-powered app, Sangier allegedly solicited more than $40 million in investments from venture capital firms and told employees to hide the true source of nate's automation. “This type of deception not only victimizes innocent investors, it diverts capital from legitimate startups, makes investors skeptical of real breakthroughs, and ultimately impedes the progress of AI development,” Podolsky said. The company acquired AI technology from a third party and had a team of data scientists develop it, but authorities claimed the app never achieved the ability to consistently complete e-commerce purchases, and its actual automation rate was effectively zero. Related: Aussie regulator to shut 95 ‘hydra’ firms linked to crypto, romance scamsDuring a busy holiday season in 2021, it’s alleged Sanger that directed nate’s engineering team to develop bots to automate some transactions on the app along with the human workers. Nate ceased operations in January 2023, and Saniger terminated all of Nate’s employees after media reports started casting doubt on the app’s capabilities, according to the SEC’s court filing. The securities and wire fraud charges each carry a maximum sentence of 20 years behind bars. The SEC suit is asking the courts to ban Saniger from holding office in any similar company and return investor funds.Cointelegraph contacted nate for comment. Information on Saniger’s lawyers was not immediately available. Magazine: Memecoin degeneracy is funding groundbreaking anti-aging researchWeiter zum vollständigen Artikel bei Cointelegraph Weiter zum vollständigen Artikel bei CointelegraphWeiter zum vollständigen Artikel bei Cointelegraph Weiter zum vollständigen Artikel bei Cointelegraph