Sustainability-focused fintech Aspiration was flying high a few years ago, attracting famous investors including Orlando Bloom, Leonardo DiCaprio, and Robert Downey Jr. Now, its co-founder has agreed to plead guilty to helping perpetuate a 248 million dollar fraud scheme, according to U.S. attorneys.
Joseph Sanberg, who was arrested in March, will plead guilty to two counts of wire fraud. These are felony counts that could land him in prison for up to 20 years each.
Acting United States Attorney Bill Essayli stated that this so-called anti-poverty activist has admitted to being nothing more than a self-serving fraudster who sought to enrich himself by defrauding lenders and investors out of hundreds of millions of dollars.
Sanberg is accused of disguising the source of payments used to inflate Aspiration’s revenue figures. He obtained letters of intent from companies interested in using the startup’s tree planting services. Those letters committed the companies to tens of thousands of dollars per month in revenue. However, the payments to Aspiration actually came from legal entities controlled by Sanberg himself, which falsely inflated the startup’s revenue.
Sanberg also allegedly fabricated a letter from Aspiration’s audit committee that claimed the startup had 250 million dollars in cash and equivalents available. In reality, Aspiration had less than one million dollars in cash.
Using that fabricated letter and the false revenue statements, Sanberg is accused of obtaining 145 million dollars in loans by pledging his own shares of Aspiration’s stock. He also allegedly worked with one of Aspiration’s board members, Ibrahim AlHusseini, to inflate AlHusseini’s assets by tens of millions of dollars in an effort to secure those loans. Aspiration subsequently defaulted on the loans twice.
Ultimately, victims of the fraud suffered more than 248 million dollars in losses, according to the U.S. attorney’s office. The office also stated that Sanberg continued to solicit investors to invest in Aspiration securities into 2025. He is expected to file a formal plea in the coming weeks.