Co-founder of 'green' bank gets 14 years for defrauding lenders, investors

LOS ANGELES — The co-founder of Aspiration Partners, a Southern California-based, environmentally-conscious online bank, was sentenced on Monday to 14 years in federal prison for defrauding lenders and investors out of $248 million.

U.S. District Judge Stephen Wilson in Los Angeles rebuffed Joe Sanberg’s bid to be spared prison all together because of his past anti-poverty work and his purported good intentions in trying to save the struggling bank he helped set up in 2013.

“The circumstances of this offense are among the worst I have encountered,” said Wilson, a Ronald Reagan appointee who has served more than 40 years as a federal judge. “This case has touched almost every badge of fraud.”

Sanberg, 46, pleaded guilty in 2025 to two counts of wire fraud. He admitted that in 2020 he fraudulently helped obtain a $55 million loan from a lender affiliated with UBS Group by scheming with one of Aspiration board members to submit forged brokerage statements that suggested that this board member had tens of millions in dollars in liquid assets to, in the event of a default, buy the collateral Sanberg had posted to secure the loan.

While Sanberg told the judge that he had to pledge everything he owned to get the loan that was needed for Aspiration to meet its payroll in the midst of the Covid-19 pandemic, Wilson noted that the proceeds of the loan were used to pay off one of Sanberg’s earlier, personal loans, as well as to buy Aspiration stock in his name.

“That appears to me as a personal benefit,” the judge said.

In November of 2021, Sanberg admitted in his plea deal, he and his co-conspirator Ibrahim AlHusseini — who also has been charged with fraud — repeated their scheme to obtain another $145 million from a different lender affiliated with UBS.

Part of this loan went to pay off the previous loan while another part was used to buy shares in meal-kit delivery business Blue Apron in Sanberg’s name.

In addition, Sanberg fraudulently boosted Aspiration’s revenues by secretly paying businesses and individuals to sign up for the bank’s tree planting services, part of its “enterprise sustainability services,” to reduce their environmental impact.

Sanberg also induced individual investors to invest in Aspiration by overstating the company’s assets by hundreds of millions of dollars. As a result, prosecutors argued, many small investors lost their life savings.

Aspiration filed for bankruptcy court protection in 2025, wiping out the investors’ stake in the bank.

“I’m deeply sorry for the harm I caused and for the terrible judgment I exercised,” Sanberg told the judge. “I wanted Aspiration to succeed so desperately that in my zeal I made terrible decisions.”

Sanberg was never an executive at the bank, and he blamed Aspirations’ failure on its management.

His attorney, Marc Mukasey, unsuccessfully pleaded with the judge to spare his client prison time on account of his good work for the community over the years, including by helping to create California’s earned-income tax credit for low income families.

“A prison sentence is too severe for how much good Joe Sanberg has done in the world and still can do,” the lawyer argued.

Aspiration Partners, among other sustainability initiatives, assured its customers that their money wouldn’t be invested in fossil-fuel businesses and allowed customers to round up transaction amounts so that the balance could be used for planting trees.

Reportedly, celebrities including Drake, Leonardo DiCaprio and Los Angeles Clippers owner Steve Ballmer invested in Aspiration.

Ballmer posted a message on X in April, sharing the victim statement he had filed with the court that details the $60 million he lost through Sanberg’s scheme.

“Five years ago, I invested in Aspiration, a company focused on environmental sustainability, a cause deeply important to me and my family,” Ballmer said. “Aspiration’s founder, Joe Sanberg, engaged in fraud that injured many, and eventually, took the company down. I was duped and feel silly about that. Everyone who believed in Aspiration, including employees, customers and investors, was also duped. Everyone is still tallying the losses.”

Follow @edpettersson