Federal prosecutors have charged Albert Sangier, founder of the Nate shopping platform, with fraud for allegedly deceiving investors about his company's artificial intelligence capabilities. According to the US Department of Justice, Sangier's claims of AI-powered universal checkout technology were actually powered by overseas contractors.
Sangier, who founded Nate in 2018, raised over $40 million from investors by promoting the platform as an AI-driven solution for streamlining online purchases across different retailers. However, investigators found that the majority of transactions were manually processed by human workers in the Philippines and Romania, or handled by basic automated scripts.
The indictment follows a 2022 investigation that revealed between 60-100% of Nate's transactions in 2021 were completed by human contractors rather than the advertised AI technology. This practice of marketing human labor as automated technology represents a modern spin on historical schemes where manual work was misrepresented as technological innovation.
The case highlights growing scrutiny of AI claims in the tech industry, as prosecutors crack down on companies that may be overstating their technological capabilities to attract investment. If convicted, Sangier could face serious penalties for allegedly misleading investors about the fundamental nature of Nate's operations.
This prosecution serves as a warning to other tech founders about the legal consequences of misrepresenting human-powered services as artificial intelligence, especially when raising capital from investors. The DOJ's action suggests increasing focus on verifying the legitimacy of AI claims in the technology sector.