Aspiration Bank co-founder sentenced to 14 years for fraud

A federal judge sentenced Aspiration co-founder Joseph Sanberg, whose now-defunct green banking fintech Aspiration has been the center of ongoing fraud investigations, to 14 years in federal prison on Monday.

Sanberg previously pleaded guilty to two counts of wire fraud in October 2025. According to a statement from the U.S. Attorney's Office for the Central District of California, Sanberg's victims suffered at least $248 million in fraud-based losses. 

"This serial fraudster used his Cinderella-like background, impressive educational credentials and virtue signaling skills to swindle investors and lenders out of hundreds of millions of dollars," said First Assistant United States Attorney Bill Essayli. "This criminal case serves as a warning: Anyone can get duped by a con man."

The court found that Sanberg and a co-conspirator, Ibrahim AlHusseini, defrauded investors by fraudulently obtaining $145 million in loans from two lenders by pledging shares of Sanberg's Aspiration stock.

The two men, who were also members of Aspiration's board of directors, then falsified bank and brokerage statements and concealed that Sanberg was the source of some of the revenue booked by the company.

"Court documents indicate that Sanberg personally recruited companies and individuals to enter agreements with Aspiration in which they committed to pay tens of thousands of dollars per month for tree-planting services," the court statement read. "The money for these customers' payments was supplied by Sanberg himself. Sanberg concealed that these payments came from him rather than from the customers. As a result, Aspiration's financial statements falsely and fraudulently reflected much higher revenue than the company in fact received."

United States District Judge Stephen V. Wilson sentenced Sanberg to 168 months in federal prison and scheduled a restitution hearing for victims on July 20.

Sanberg co-founded Aspiration with Andrei Cherny in 2013 and launched the neobank two years later. Cherny served as the fintech's CEO from 2013 to 2022 and said in an X post that Sanberg's criminal actions were among the reasons he decided to resign.

"Those now calling our company a 'fraud' are blaming the victims," Cherny said at the time. 

The digital banking fintech originally drew celebrity backers such as Robert Downey Jr., Orlando Bloom and Leonardo DiCaprio and partnered with the likes of Meta and Microsoft.

"Joseph Sanberg preyed on investors and lenders who believed in his vision of environmentally conscious fintech," said Assistant Attorney General Andrew Tysen Duva of the Justice Department's criminal division. "Instead of delivering on Aspiration's promises, he orchestrated a multi-year scheme involving fake clients, sham payments and deceptive loan collateral."

Federal prosecutors had sought a prison sentence of 212 months, or nearly 18 years. Each count of wire fraud carried a maximum 20-year prison sentence.

"This sentence holds him accountable and serves as a clear warning to others who abuse trust for personal gain and obtain loans from the financial industry based on lies and misrepresentations," Duva said.

Sanberg's sentence is comparable to other financial fraud cases in recent years. Charlie Javice, for example, was sentenced with seven years in prison for defrauding JPMorganChase in its $175 million acquisition of her student-finance startup Frank. In another high-profile case, FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison after being found guilty of seven counts of fraud and conspiracy relating to the now-defunct cryptocurrency exchange platform.

Aspiration originally went public through a SPAC in 2021, then pivoted to selling carbon offsets before collapsing under a mountain of debt early last year. The fintech's successor firm, CTN Holdings, filed for Chapter 11 bankruptcy in April 2025 following Sanberg's arrest on fraud charges.

The consumer fintech arm of the company escaped that fate by spinning off in April 2024, converting Aspiration's consumer financial services operation into a standalone company that was later rebranded to GreenFi. Washington-based community bank Coastal Financial Bank, one of GreenFi's oldest partners, acquired the fintech for an undisclosed sum early this year.

Aspiration is still handling multiple ongoing investigations. The fintech announced a $300 million endorsement deal with the NBA baseball team LA Clippers in September 2021 and a $28 million deal with star player Kawhi Leonard in April 2022. 

The deal came under investigation by the NBA in 2025 after allegations that it circumvented NBA salary cap rules, which the team has denied. Clippers owner Steve Ballmer had previously invested $60 million into Aspiration Bank and claimed that the fintech "conned" him in his response to the allegations.