Joseph Sanberg, a co-founder of the financial services company Aspiration, has made a big bet. He is expected to plead guilty to two counts of wire fraud. All of the charges stem from the alleged scheme, which boosted the company’s financial picture. This scheme resulted in more than $248 million in losses to unsuspecting investors and lenders. Each count of the wire fraud charges comes with a potential prison sentence of up to 20 years.
Sanberg’s legal woes started when he was arrested in March. Prosecutors accuse him of working with Ibrahim AlHusseini to make AlHusseini’s assets appear tens of millions of dollars higher than they actually were. To obtain the loans for $145 million, Sanberg allegedly submitted forged documents — most notably an account from a phony letter along with misleading revenue reports.
In a particularly sneaky sleaze tactic, Sanberg then secured the loans with his own Aspiration stock by pledging his individual stock in Aspiration against the loans. He even further disguised the payments he used to artificially inflate Aspiration’s revenue numbers, with money channeled from shell corporations he controlled. This manipulation further deceived investors to think that Aspiration had a far better financial prospect than it possessed.
Prosecutors recently disclosed that Sanberg authored a fraudulent letter from Aspiration’s audit committee. This fabricated offering, which was never registered, alleged the startup possessed $250 million in cash and equivalents available. In truth, the firm maintained a lot less than $1 million in cash. And even with these financial gaps, as of the pandemic’s onset, Sanberg was nonetheless still asking investors to buy Aspiration securities, seeking to line up investments through 2025.
Bill Essayli, the prosecution’s spokesperson, was harshly critical of Sanberg’s conduct. In Foer’s telling, Sanbergh’s once-lauded credentials as an “anti-poverty” activist have been irreparably harmed by his trickster, fraudulent conduct.
“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
Sanberg has a PhD in environmental science, policy, and management from the University of California, Berkeley. He has a BA in environmental studies, English, and biology from St. Olaf College.
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