A fintech startup that has raised $ 40 million according to the premise of its artificial intelligence capacities was fueled by human work, frauding investors attracted by the new technology of millions, the federal prosecutors said this week in a declaration.
Albert Saniger, 35, former CEO and founder of Nate in 2018, who is in Barcelona, Spain, was charged in the South New York district for participating in a plan aimed at defrauding investors and making false declarations on the capacities of the AI of his business.
Nate, an electronic commerce company, launched the NATE application which claimed to rationalize the online purchase checkout process via a single TAP option supplied by AI. But the application was not at all fueled by AI advanced technology, according to the charge.
With the promise of “tailor -made learning models that would allow the application to buy goods directly on product pages in less than three seconds, Saniger has collected more than $ 40 million. While asking employees to keep Nate’s appeal to secret foreign workers, he presented investors with a product focused on AI capable of 10,000 daily transactions.
Instead, the application would have relied heavily on foreign workers in two different countries that have manually treated transactions, imitating what users thought they were done by automation. Saniger, on the other hand, would have told investors and the public that the transactions were finished by the AI.
“Saniger would have abused the integrity associated with its old CEO position to perpetuate a program full of smoke and mirrors”, the United States Ministry of Justice said in a declaration.
In the absence of technology, Saniger would have relied heavily on hundreds of workers in a call center in the Philippines, court documents said. When a Fatal tropical storm struck The country in October 2021 said that Nate created a new call center in Romania to manage the backlog of customer services. Investors were probably never exposed to access to transactions because Saniger directed that investors transactions have priority to avoid suspicion.
The consequences of the company’s repercussions in 2023 left investors with almost total losses, the indictment said.
US private AI investment has increased 109.1 billion dollars last year – and the United Nations trade and development branch said that the market share is about to climb towards $ 4.8 Billions by 2033.
AI is largely perceived as being free from human intervention, but reality draws up a more complicated image. Nate is not the only company to have benefited from AI thanks to cheap work abroad.
In 2023, the Washington Post exposed “ Digital sweatshops ” in the Philippines where employees worked on content to refine American AI models for a company called Scale IA, that multinational technology conglomerates like Meta, Microsoft and Openai use.
CBS News contacted the office of the American lawyer and Saniger to comment.
