Aspiration, the tree-planting neobank felled by investor fraud

• Key insight: Investor-level fraud toppled a purpose-driven neobank and exposed sponsor risks.
• Expert quote: Auditors warned of revenue transactions "with characteristics of fraud," per KPMG.
• Forward look: An ongoing NBA investigation will determine whether Aspiration violated league rules.

Overview bullets generated by AI with editorial review

Aspiration Partners, a neobank that focused on helping consumers neutralize their carbon footprint, finalized bankruptcy proceedings this month shortly after Joseph Sanberg, one of the company's co-founders, pleaded guilty to defrauding company investors.

As the bankruptcy and fraud prosecution have winded down, a new controversy around the neobank has spun up: That it facilitated a violation of National Basketball Association, or NBA, league rules.

Sanberg orchestrated extensive investor fraud

Sanberg agreed last month to plead guilty to federal charges to two counts of wire fraud, acknowledging his role in defrauding investors and lenders of at least $248 million.

Simultaneously, the Securities and Exchange Commission, or SEC, charged Sanberg, asserting he raised "more than $300 million from investors based on a fraudulent scheme to generate and mislead investors about fake revenues for environmental sustainability services."

Between January 2021 and December 2022, according to the SEC, Sanberg orchestrated a scheme to artificially inflate Aspiration's revenue, aiming to attract investors and increase the company's stock value.

He recruited friends, associates, small businesses and religious organizations as "LOI Customers" to sign "letters of intent" for reforestation services, creating a false impression of rapid business growth.

In reality, these LOIs were a "sham," according to the SEC complaint, because the purported customers had no intention of paying for the services.

Sanberg explicitly told these LOI customers they would receive services "at no charge" and that Aspiration or Sanberg himself would cover the costs, according to the SEC complaint. He then funded the payments in a way that hid from Aspiration the fact that he was the one paying.

This fraudulent activity severely distorted Aspiration's financial health, according to the SEC. It artificially increased the company's revenue by approximately $44 million in fiscal year 2021, with about $33.9 million of that amount remaining uncollected by year-end or paid by Sanberg.

Sanberg personally gained over $3.6 million in cash in 2021 and approximately $8 million in 2022, in addition to stock options, through these actions.

The depth of the deception became evident when KPMG resigned as Aspiration's independent auditor in July 2022, citing "revenue transactions that had characteristics of fraud," according to the SEC complaint.

Aspiration subsequently restated its financial statements for 2021 and 2022 and filed for Chapter 11 bankruptcy in March 2025.

Andrei Cherny, who co-founded Aspiration and served as its CEO from 2013 to 2022, said Sanberg's criminal actions were among the reasons he decided to resign in 2022 and contributed to the company's eventual bankruptcy.

"Those now calling our company a 'fraud' are blaming the victims," Cherny said in a post on X. He asserted that Aspiration's employees, customers and investors were "hurt most by what Sanberg did."

Circumstantial evidence links Aspiration to Clippers' salary cap questions

A swirling controversy accompanied Aspiration's collapse, centering on its relationship with NBA team LA Clippers and team superstar Kawhi Leonard. Investigative journalist Pablo Torre raised the controversy in a video report earlier this month on his podcast.

According to Torre, Steve Ballmer, a former Microsoft executive and current owner of professional basketball team the Los Angeles Clippers, potentially circumvented NBA salary cap rules by using an investment in Aspiration to indirectly pay the Clippers' star player, Kawhi Leonard, to stay on the team.

Court records show that Aspiration owed Leonard, through his California-registered LLC KL2, $7 million. The records also show Ballmer, through a Washington-registered LLC Polpat, had roughly 2% equity in Aspiration.

In his report, Torre published the endorsement contract Leonard had signed with Aspiration, which was to pay Leonard $28 million over four years.

The contract included a clause allowing Leonard to decline promotional activities that were "not consistent with his beliefs," which according to Torre's report effectively made the contract a "no-show job" because it gave Leonard a simple means of getting out of promotional duties if he didn't want to do them.

Torre also highlighted a part of Leonard's contract with Aspiration that allowed the company to terminate the agreement if Leonard was "no longer an employee of the team for any reason." This, according to Torre's report, meant Leonard only got paid if he kept playing for the Clippers.

Leonard reportedly never publicly endorsed Aspiration.

The NBA said after Torre published the report that it would investigate the matter.

Aspiration, Clippers, Ballmer deny suggestions of wrongdoing

The day after Torre's report, ESPN published an interview with Ballmer in which he denied that he had violated NBA rules. In particular, he denied circumventing the salary cap, which is an upper limit the NBA places on how much teams can pay any given player per year — a mechanism for ensuring smaller teams can be competitive against larger ones.

Ballmer said in the interview with ESPN that Aspiration had "conned" him.

"I made an investment in these guys thinking it was on the up-and-up, and they conned me at this stage," Ballmer said. "I have no ability to predict why they might have done anything they did, let alone the specific contract with Kawhi."

For his part, Cherny, who signed the contract with Leonard shortly before he resigned, refuted the claim that it was a "no-show" contract.

"The contract contained three pages of extensive obligations that Leonard had to perform," Cherny said on X. "And the contract clearly said that if Leonard did not meet those obligations, Aspiration could terminate the contract."

Cherny also indicated he did not recall "conversations about the NBA salary cap" during executive discussions prior to signing the sponsorship.

The LA Clippers signed a partnership with Aspiration in 2022, but also strongly denied any wrongdoing, telling ESPN, "Neither the Clippers nor Steve Ballmer circumvented the salary cap."

The team called the idea that Ballmer invested in Aspiration in order to funnel money to Leonard "absurd" and reiterated that Ballmer invested because Aspiration's co-founders presented themselves as environmentally conscious and committed to customers.

"Neither Steve nor the Clippers had knowledge of any improper activity by Aspiration or its co-founder until after the government initiated its investigation," the team said.

The Clippers said that "nothing is unusual or untoward about team sponsors doing endorsement deals with players on the same team" and that they "had no oversight of Kawhi's independent endorsement agreement with Aspiration."

The team also said it was committed to NBA compliance and its cooperation with law enforcement's investigation into Aspiration's fraudulent activity.

Mark Cuban, a minority owner of the NBA's Dallas Mavericks, weighed in on the controversy.

"I'm on Team Ballmer," Cuban said in a post on X.

While Cuban said he does wish the Clippers had "circumvented the salary cap," he said Ballmer "isn't that dumb." Had Ballmer been doing something that violated NBA rules, he would not have let Aspiration go bankrupt, knowing the company's financials would become public if it did, Cuban said.

"They got scammed by Aspiration, along with many others," Cuban said. "Scammers do scammy things."