In the tech industry, embellishing product features is common, yet the case of Nate, an app company that raised significant funds, raises eyebrows. Initially, they marketed a fully automated shopping app powered by AI. However, investigations revealed that hundreds of human workers in Romania and the Philippines were actually doing the job.

Nate, launched in 2018 with over $50 million in investments, led users to believe that with a tap of a button, a machine would handle their shopping needs.

But The Information’s investigation uncovered that the touted AI functionalities were misrepresented, resulting in fraud charges against its former CEO, Albert Saniger, by the U.S. Department of Justice. “Saniger allegedly misled investors about his company’s AI capabilities while employing humans to create an illusion of automation,” commented FBI Agent Christopher G. Raia.

Saniger faces serious charges including securities and wire fraud, with potential prison sentences reaching up to 20 years.

This incident highlights the necessity for skepticism regarding tech claims and underscores the importance of reliable verification in today’s digital marketplace.