The U.S. Securities and Exchange Commission (SEC) charged Joseph Neal Sanberg, the co-founder and former board member of Aspiration Partners, Inc., for raising more than $300 million from investors based on a fraudulent scheme to generate and mislead investors about fake revenues for environmental sustainability services.
The SEC complaint, filed in the Central District of California, charges Sanberg with violating the anti-fraud sections of the Federal Securities Laws, specifically: Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder.
The SEC’s enforcement complaint alleges that while Aspiration was seeking to go public via a SPAC merger, Sanberg engaged in a scheme to create the appearance of tens of millions of dollars in revenues from customers for reforestation services, whereby customers interested in lowering their carbon footprint paid Aspiration to plant trees. Sanberg used the inflated revenue figures to raise over $300 million from Aspiration investors, solicit additional investors, and receive millions in compensation from Aspiration, the SEC contends.
The SEC alleged that: To make it appear as though Aspiration’s business was rapidly growing, Sanberg recruited friends, associates, small businesses, and religious organizations and presented them to Aspiration as bona fide customers who were fully committed to paying large sums of money for Aspiration’s services. These purported customers signed “letters of intent” or other one-to-two-page agreements (“LOIs”) promising to pay $25,000 to $750,000 on a recurring basis in return for the company’s reforestation services. However, these LOIs were a sham because the purported customers (the “LOI Customers”) had no intention of paying for the sustainability services they received from Aspiration. In fact, Sanberg made it clear to the LOI Customers that they did not actually have to pay for the services Aspiration provided. Sanberg secretly paid for these services with funds from accounts he controlled.
The SEC seeks permanent injunctions, including a conduct-based injunction, disgorgement with prejudgment interest, civil penalties, and an officer-and-director bar. In a parallel action, the U.S. Attorney’s Office for the Central District of California and the U.S. Department of Justice announced criminal charges against Sanberg.
Securities Offering Fraud Lawyer
David Chase, of the Law Firm of David R. Chase, is an often-quoted and nationally recognized SEC enforcement fraud defense lawyer who has successfully represented individuals in SEC investigations around the nation for more than 25 years, having previously served in the SEC’s Division of Enforcement in the capacity as a Senior Counsel. If you are under SEC investigation for misappropriating investor funds and require experienced and knowledgeable counsel to protect you through the investigatory process, contact David at: 800-760-0912 or e-mail him at: david@davidchaselaw.com for a free, confidential consultation. Visit the Firm’s website to read about David’s SEC defense experience and the firm’s recent successful results for its clients at: www.securitiesfrauddefense.net.
