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 will plead guilty to helping perpetuate a $248 million fraud scheme, according to U.S. attorneys.
Joseph Sanberg, who was arrested in March, has agreed to plead guilty to two counts of wire fraud, felony counts that could land him in prison for up to 20 years each.
“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,” Acting United States Attorney Bill Essayli said in a statement yesterday.
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, according to the U.S. Attorney’s office of the Central District of California.
But the payments to Aspiration instead came from legal entities controlled by Sanberg, falsely inflating the startup’s revenue.
Sanberg also allegedly fabricated a letter from Aspiration’s audit committee that said the startup had $250 million in cash and equivalents available. In reality, Aspiration had less than $1 million in cash.
Using that fabricated letter and the false revenue statements, Sanberg is accused of obtaining $145 million 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 obtain those loans. Aspiration defaulted on the loans twice.
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Ultimately, victims of the fraud suffered more than $248 million in losses, according to the U.S. attorney’s office.
“Sanberg continued to solicit investors to invest in Aspiration securities into 2025,” the U.S. attorney’s office said. He is expected to file a formal plea in the coming weeks.
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