“Anti-Poverty Advocate” arrested for conspiring to defraud two investors of $145 million

When you hear the word “green” replace it with “fraud” and you’ll rarely be wrong.

Here’s Case #101.

Three years ago, Aspiration Partners had turned a debit card designed for sustainable shopping and investment accounts that promised complete exclusion of fossil-fuel stocks into a high-flying climate startup. The Los Angeles-based company had set itself on the verge of a stock market debut with an expected valuation of more than $2 billion.

Going public would have brought a big payday for a star-studded list of investors who had supported Aspiration over a decade, including Steve Ballmer, Leonardo DiCaprio, Orlando Bloom, Robert Downey Jr., and Cindy Crawford. Canadian rapper Drake promoted the company, and its catchy tagline, “Clean rich is the new filthy rich,” was displayed on billboards and building walls from Los Angeles to Brooklyn.

Get some for some filthy green schadenfreude.

“Meet Aspiration,” one of its earliest ads declared, “Wall Street greed’s worst nightmare.”

“It was revolutionary,” says Amr Mohamed, who ran Aspiration’s engineering team from 2013 to 2016. The company’s fundamental idea, he said, was “if you want people to trust a bank, the bank has to trust people first.”

Aspiration started adding climate-friendly features, like investment funds that excluded oil companies and a pledge to plant a tree each time a customer swiped a credit card.

How about locking up an Aspiration executive every time a customer swipes a credit card?

A prominent Southern California businessman known as an “Anti-Poverty Advocate” was arrested after allegedly conspiring with a Venice man to defraud two investors of at least $145 million, according to federal prosecutors.

Prosecutors allege Sanberg obtained $145 million in loans secured by his alleged co-conspirator, 51-year-old Ibrahim Ameen AlHusseini. Sanberg allegedly knew that AlHusseini didn’t have the funds to cover the loans if Sanberg defaulted, but hid that fact from investors. Sanberg then defaulted on the loans, leading to losses totaling at least $145 million, according to the U.S. Attorney’s Office.

Sanberg started negotiating a $55 million loan in January 2020 from “Investor Fund A,” in which he pledged 10.3 million shares of Aspiration Partners stock as collateral, according to prosecutors.

This comes after California voters turned down Sanberg’s proposition to raise the state minimum wage, and between this and the arrest, he’ll probably never be president.

California entrepreneur and investor Joe Sanberg, who is mulling a presidential bid as a Democrat, is putting out feelers in Ohio.

“The reason Democrats have rejected a lot of businesspeople who’ve gone into politics is, frankly, smart,” he said in an interview with cleveland.com. “Most businesspeople who go into politics are trying to defend the status quo. What I’m trying to do is use the credibility I have as an entrepreneur to explain why the status quo is totally broken and we can fix it.”

His potential candidacy would focus on eliminating poverty, partly through breaking up wealth concentration, he said. He supports the Green New Deal and single-payer health care.

Good luck with that.

Aspiration recently relaunched its corporate business as Catona Climate to focus on selling carbon credits to companies like Meta Platforms Inc. and Microsoft Corp. But Aspiration, which halted its plans for an initial public offering last year, faces an arduous path ahead. Eden Reforestation Projects, its one-time tree planting partner, is pursuing Aspiration for millions of dollars in expenses that Eden says it incurred. After raising over $500 million from investors over the past decade, Aspiration is now “insolvent” and “has no reasonable means of becoming profitable,” according to a court filing in June by Inherent Group, a lender to Aspiration which is requesting that Aspiration be put into receivership so the former climate high-flier can be wound down or restructured “in an orderly fashion.”

When they say “green”, you hear “fraud”.

Article posted with permission from Daniel Greenfield