An Orange County man who co-founded the online financial services company Aspiration Partners pleaded not guilty Tuesday to conspiring to bilk investors out of $248 million, but is expected to enter a guilty plea to federal charges next week.
Joe Sanberg, 46, of Orange has agreed to plead guilty Sept. 15 in Los Angeles federal court to two counts of wire fraud, felonies that each carry a sentence of up to 20 years behind bars, according to the U.S. Attorney's Office.
Ibrahim AlHusseini, 51, of Venice, a former Aspiration board member and investor, pleaded guilty in March to wire fraud for falsifying documents that aided in the scheme, federal prosecutors said.
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Prosecutors say Sanberg and AlHusseini fraudulently obtained $145 million in loans several years ago from two lenders by pledging shares of Sanberg's Aspiration stock. Sanberg and AlHusseini also falsified AlHusseini's bank and brokerage statements to inflate AlHusseini's assets by tens of millions of dollars to secure the loans, court papers allege.
Beginning in 2021, Sanberg also defrauded Aspiration's investors by concealing that he was the source of certain revenue recognized by the company, according to the U.S. Attorney's Office.
Court documents also allege that Sanberg personally recruited companies and individuals to sign letters of intent with Aspiration in which they committed to pay tens of thousands of dollars per month for tree planting services. Sanberg allegedly used legal entities under his control to conceal that these payments came from himself rather than from customers. He also instructed Aspiration employees not to contact the customers that he had recruited to conceal his scheme, prosecutors stated.
Aspiration -- an early investor in meal delivery service Blue Apron -- booked revenue from the customers between March 2021 and November 2022, but Sanberg allegedly did not disclose that he was the source of the payments. As a result, Aspiration's financial statements were inaccurate and reflected much higher revenue than the company in fact received, according to prosecutors. Sanberg continued to solicit investors to invest in Aspiration securities into 2025, court papers show.
According to federal prosecutors, Sanberg defrauded other lenders and investors with fraudulent materials describing Aspiration's financial condition, including a fabricated letter from Aspiration's audit committee that falsely stated Aspiration had $250 million in available cash and equivalents at a time the company had less than $1 million in available cash.
Sanberg used these fraudulent financial materials to obtain millions of dollars in additional loans and investments in Aspiration securities, officials said. As a result of the fraud scheme, victims sustained more than $248 million in losses, according to the U.S. Attorney's Office.
In 2018, it was reported that Sanberg was considering a run for president in 2020 on an "anti-poverty platform," but ultimately decided against it.
"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 U.S. Attorney Bill Essayli for the Central District of California said in a statement last month when Sanberg agreed to plead guilty. "I commend our law enforcement partners for their efforts in this case, and I urge the investing public to use caution and beware of wolves in sheep's clothing."
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