Aspiration co-founder sentenced to 14 years for fraud
Aspiration co-founder Joseph Sanberg was sentenced to 14 years in prison Monday for defrauding investors and lenders of more than $248 million.
The startup, an eco-friendly digital banking company that boasts a debit card that offers fossil fuel-free investments, carbon offsets for gas purchases, and cash back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and no charges were filed.
Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.
Sanberg and venture capitalist Ibrahim AlHusseini, who is also facing criminal charges, together created a series of bank statements to obtain a loan. From 2020 to 2021, the duo forged bank statements showing AlHusseini’s assets worth millions of dollars to obtain millions of dollars from lenders.
Additionally, they forged a letter from audit committees stating that they had $250 million in funds, when in reality Aspiration had less than $1 million. The amount of fraudulent loans exceeded $248 million.
In 2021, Sanberg artificially increased Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent committing tens of thousands of dollars per month for tree-planting services. Sanberg financed the contracts himself and used the inflated revenue figures to obtain more loans.
The accusations sparked an NBA investigation into salary cap allegations due to Aspiration’s connections to Clippers owner Steve Ballmer.
Ballmer personally invested $60 million in Aspiration, and the entire investment was lost. He is now the target of a civil lawsuit alleging his participation in this scheme. Ballmer denies the allegations.
The team announced a $300 million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28 million marketing contract with the company, reportedly performing no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.
The team lost a $300 million sponsorship deal and an additional $20 million paid for carbon offset purchases.
