Joe Sanberg, a California Democratic activist and major donor to Gov. Gavin Newsom, admitted that he engaged in a massive fraud scheme tied to his financial technology and carbon-credit startup Aspiration Partners Inc.
Sanberg pleaded guilty to two counts of wire fraud and faces up to 40 years in prison, the Department of Justice confirmed.
Aspiration pitched itself as the “cleaner alternative” to Wall Street with the slogan “clean rich is the new filthy rich” — promising carbon offsets, tree planting in Africa, and investments free of polluting industries. Investors included Hollywood stars Leonardo DiCaprio and Robert Downey Jr.
But prosecutors said Sanberg fabricated customers, funneled fake payments, and propped up inflated revenue claims to lure over $300 million from investors. “Sanberg built a business on a lie to boost the company’s value and line his own pockets,” the U.S. Postal Inspection Service said.
DOJ and SEC: A “Carbon Credit” Mirage
Bill Essayli, Acting U.S. Attorney for the Central District of California, blasted Sanberg as a fraudster who used his “anti-poverty activist” persona as cover:
“This so-called activist has admitted to being nothing more than a self-serving fraudster, by seeking to enrich himself by defrauding lenders and investors out of hundreds of millions of dollars.”
The SEC’s civil charges detail how Sanberg recruited friends, associates, churches, and small businesses to pose as Aspiration customers, then personally funded “payments” to make the deals appear legitimate.
In 2021, while Aspiration tried to go public via SPAC, Sanberg and co-founder Andrei Cherny (a former Clinton/Gore aide and Arizona Democratic Party chair) touted 584% revenue growth — figures now alleged to be fictitious. Outside auditors resigned, citing “characteristics of fraud.”
Lavish Spending and Political Ambitions
Despite hemorrhaging cash, Aspiration paid Sanberg millions. The board gave him an $8 million bonus in 2022, even as reserves dwindled. Sanberg took $100 million in personal loans backed by his shares.
He was also a fixture in California politics. Sanberg donated heavily to Newsom, spent $11 million pushing a 2024 ballot measure to raise the state minimum wage to $18 (narrowly defeated), and was profiled by The Atlantic in 2019 under the headline: “Joe Sanberg Dares Trump to Call Him a Socialist.”
He even floated a Democratic presidential run ahead of 2020.
The Alhusseini Connection
The probe into Aspiration widened after fellow board member Ibrahim Alhusseini, a Saudi-born Democratic donor tied to the far-left group CodePink, was accused of defrauding lenders with falsified bank statements.
Court filings show Alhusseini claimed assets of up to $200 million when his brokerage accounts held just a few thousand dollars. He was arrested in October 2024 and released on $3 million bail put up by wealthy progressive allies, including CodePink founder Jodie Evans.
Alhusseini later turned on Sanberg, accelerating the investigation. Prosecutors allege he moved $300 million abroad and spent lavishly — including $16,000 at a Four Seasons in Greece and $10,000 at Gucci in New York — while donating to progressive politicians such as Reps. Cori Bush and Alexandria Ocasio-Cortez.
Fallout for the ESG Movement
Sanberg’s downfall raises questions about the carbon-credit and ESG finance industry, which critics call “greenwashing.”
Aspiration promised corporations real environmental impact, but investigators concluded the claims were largely smoke and mirrors. “Carbon credits” often amounted to little more than partisan marketing, prosecutors suggested.
Sanberg is scheduled for sentencing later this year.
