US authorities have charged Albert Saniger, the founder of the Nate app, with fraud, asserting that his claimed AI-powered e-commerce application actually relied on human workers in the Philippines to process transactions manually. Launched in July 2020, the Nate app promised users a seamless online shopping experience without human intervention. However, the Justice Department revealed that Saniger employed hundreds of workers, referred to as 'purchasing assistants,' who completed tasks associated with online purchases. This misrepresentation allegedly led to over $40 million in investments as Saniger exploited the appeal of AI technology. The SEC also filed a civil action against him, aiming to impose fines and ban him from future corporate roles. Following media scrutiny regarding the app's capabilities, Nate ceased operations in January 2023. Both securities and wire fraud charges could result in a maximum of 20 years of imprisonment for Saniger if convicted.

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