# The AI shopping app that ran on people: DOJ and SEC charge Nate's founder over an 'effectively zero percent' automation rate
> On 9 April 2025 the U.S. Attorney for the Southern District of New York indicted Albert Saniger, founder and former CEO of the shopping app Nate, for defrauding investors about its AI; the indictment alleges that while Nate claimed to complete online purchases with AI 'without human intervention', the app's actual automation rate 'was effectively zero percent' and hundreds of contractors in a Philippines call center completed the purchases by hand. The SEC filed a parallel civil action the same day, alleging Saniger raised over $42 million on the AI claims.
- Verification status: verified
- Case type: deployment
- Provider: Nate, Inc. (marketed the nate universal shopping-cart app as AI that autonomously completed online purchases)
- Client: Nate, Inc. (founder and former CEO Albert Saniger), E-commerce / online shopping-automation app (named)
- Sector: retail / US / cross
- Canonical URL: https://theinternetninja.com/stories/doj-sec-nate-saniger-ai-shopping-app-effectively-zero-percent-automation-40m-securities-wire-fraud-2025/
- Source: The Internet Ninja (theinternetninja.com), independent verified-proof platform
## Outcomes
| Metric | Before | After |
| --- | --- | --- |
| Alleged actual AI automation rate | | |
| Who actually completed the purchases | | |
| Capital raised on the AI representations | | |
| Charges filed | | |
## Verification method
Every figure quoted verbatim from two independent U.S. federal agencies: the DOJ/SDNY press release (No. 25-082, 9 April 2025) and SEC Litigation Release No. 26282 (11 April 2025), each retrieved this session from its Wayback capture (live justice.gov and sec.gov both refuse automated fetchers) and stored in sources/. Presented throughout as allegations in a pending indictment and civil complaint, not adjudicated findings.
## FAQ
**What did the DOJ and SEC allege about Nate's AI shopping app?**
The DOJ indictment alleges that while Nate claimed to complete purchases with AI 'without human intervention', the app's actual automation rate was 'effectively zero percent', with hundreds of contractors in a Philippines call center completing the orders by hand. The SEC filed a parallel civil action the same conduct.
**How much did Albert Saniger raise on Nate's AI claims?**
The DOJ says Saniger raised more than $40 million from investors on his AI representations; the SEC puts the figure at over $42 million through the sale of Nate stock, raised between spring 2019 and December 2022.
**What charges does Albert Saniger face?**
The DOJ charged one count of securities fraud and one count of wire fraud, each carrying a maximum sentence of 20 years. The SEC's parallel complaint (No. 1:25-cv-02937) charges violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. Every figure is an allegation; Saniger is presumed innocent.
## Full case file
**Every figure below is an ALLEGATION by the DOJ or SEC in charging papers, not an adjudicated finding, and Albert Saniger is presumed innocent unless and until proven guilty. What is verified here is the public record of what two federal agencies formally charged.**
## The problem
"Skip the checkout" was the pitch: open the nate app, tap "buy", and proprietary AI would finish the purchase on any retail site, selecting the size, entering billing and shipping, and confirming the order ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). Nate, founded in 2018, marketed that single defining feature, the ability to "intelligently and quickly complete retail transactions across all e-commerce sites through the use of AI technology" ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). On 9 April 2025 the U.S. Attorney for the Southern District of New York indicted the company's founder and former CEO, Albert Saniger, alleging the automation never existed ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). This is a verified negative: a public record of what two federal agencies formally charged about the gap between an AI pitch and the system that actually ran.
## What was claimed
In pitch materials sent to investors, Saniger touted Nate's use of AI and represented that the app was "able to transact online without human intervention" ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). During due diligence he repeatedly represented that, except for certain "edge cases" where the AI failed, the nate app was fully automated based on AI ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). The SEC's complaint alleges he told investors in both Nate's Seed and Series A rounds that the app "used automated technology that relied on AI to complete purchases made through the app without human involvement" ([source](https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26282)).
## What the indictment alleges actually ran
According to the DOJ, "at the time nate was claiming to use AI to automate online purchases, the app's actual automation rate was effectively zero percent" ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). The indictment alleges Nate "relied heavily on teams of human workers, primarily located overseas, to manually process transactions in secret, mimicking what users believed was being done by automation," using "hundreds of contractors, or 'purchasing assistants,' in a call center located in the Philippines" ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). The SEC frames the same conduct: Nate "relied in large part on contract employees to manually input orders," its success rate was "lower than what he represented to investors," and the app "was not able to use AI to complete purchases" ([source](https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26282)). The DOJ adds that in fall 2021, before the holiday shopping season, Saniger directed Nate's engineers to build "bots" to automate some transactions, despite prior representations that Nate did not use bots ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). The DOJ alleges he concealed the true rate: he told employees to keep the automation rate secret, restricted access to Nate's "automation rate dashboard," and called the data a "trade secret" ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)).
## The outcome
The DOJ alleges Saniger "raised more than $40 million from multiple investors based in part on his representations to investors about nate's development and deployment of AI" ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). The SEC puts the figure at "over $42 million through the sale of Nate stock," raised between spring 2019 and December 2022 ([source](https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26282)). Saniger, described by the DOJ as 35 and of Barcelona, Spain, is charged with one count of securities fraud and one count of wire fraud, "which carries a maximum sentence of 20 years in prison" each ([source](https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)). The SEC's parallel complaint (No. 1:25-cv-02937, S.D.N.Y.) charges violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5, seeking permanent injunctions, an officer-and-director bar, disgorgement with prejudgment interest, and civil penalties ([source](https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26282)).
## Why this matters for buyers
The charges describe, in prosecutor-grade language, the exact failure mode TIN's verification model exists to catch: an "AI" product whose real automation rate is zero and whose output is produced by hidden human labor. The point of leverage is the same one Nate allegedly hid from its own staff: the automation-rate number itself. Before you trust an AI-automation claim, ask what the measured automation rate is, who is allowed to see the dashboard, and who completes the transactions when the model does not.
## How this was verified
Method: both critical figures ("effectively zero percent"; "$40 million"/"$42 million") were quoted verbatim from two independent federal charging documents, the DOJ/SDNY press release No. 25-082 (9 April 2025) and SEC Litigation Release No. 26282 (11 April 2025), retrieved 27 August 2026 from their Wayback captures (dated 13 August 2026 and 14 June 2026 respectively) because both live government sites refuse automated fetchers, and archived into sources/. Weakest-link honesty: these are the strongest possible sources for *what was charged*, but they are charging papers, so every figure is an ALLEGATION, not an adjudicated fact. There is no conviction, plea, or final judgment on this record; if the case resolves, the outcome (not the allegation) would be the fact to cite. This story is therefore a verified record of a first-of-its-kind AI-washing prosecution, not a proven finding of guilt.
## Related case files
- [SEC's Presto order: a "voice AI" drive-thru that needed a human on every order](/stories/sec-ai-washing-presto-automation-voice-ai-drive-thru-human-agents-cease-and-desist-2025/): the same pattern in a signed regulatory order rather than an indictment.
- [FTC's DoNotPay settlement over "the world's first robot lawyer"](/stories/ftc-donotpay-ai-robot-lawyer-193k-monetary-relief-final-order-2025/): a consumer-protection action on overstated AI capability.
- [SEC's Delphia and Global Predictions AI-washing penalties](/stories/sec-ai-washing-delphia-global-predictions-400k-civil-penalties-2024/): the SEC's earlier civil AI-washing enforcement, here escalated to criminal charges.
## Sources
1. U.S. Attorney's Office, Southern District of New York · "Tech CEO Charged In Artificial Intelligence Investment Fraud Scheme" (Press Release 25-082) · 9 April 2025 · **Tier 1 (primary, federal charging document)** · https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme (archived: https://web.archive.org/web/20260813124241/https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme)
2. U.S. Securities and Exchange Commission · "SEC Charges Founder and Former CEO of Artificial Intelligence Startup with Misleading Investors" (Litigation Release No. 26282; SEC v. Saniger, No. 1:25-cv-02937) · 11 April 2025 · **Tier 1 (primary, federal civil complaint)** · https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26282 (archived: https://web.archive.org/web/20260614032844/https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26282)