The U.S. Department of Justice has charged Albert Saniger, the former CEO of Nate, a company specializing in developing artificial intelligence-based applications for online shopping, with fraud.
This is reported by Бізнес • Медіа
According to the agency, the Nate project, launched in 2018, was marketed as a “magical app for online shopping.” Developers claimed that the order placement and payment processes were automated using artificial intelligence, and users only needed to confirm the transaction.
Despite attracting around $51 million in investments, it was revealed that Saniger deceived investors by claiming that a unique artificial intelligence algorithm was at the core of the program.
“Although Saniger acquired AI technology from a third party and hired specialists to maintain its operation, the AI of Nate never achieved the promised functionality,” the U.S. Department of Justice stated.
According to the agency, the actual level of automation in the app was about 0%. Saniger concealed this information from investors and most of the company’s employees. To process orders, he hired outsourcing teams that performed this work manually. In particular, hundreds of employees worked in a call center in the Philippines, performing functions that were supposed to be handled by artificial intelligence.
Saniger has been charged with securities and electronic communications fraud, which could lead to 40 years in prison. The former CEO of Nate left his position in 2023, and the company was forced to sell off most of its assets to cover liabilities, but investors suffered significant losses. As of today, the project is still active, according to information on the official website.