SEC v. Joseph Neal Sanberg — U.S. Securities and Exchange Commission Litigation Release No. 26382, dated August 21, 2025.
The SEC charged Joseph Neal Sanberg, co-founder of Aspiration Partners, Inc., for orchestrating a scheme to inflate the company's revenues by over $300 million. Sanberg allegedly used friends and associates as fake customers for reforestation services, paying them himself to create the illusion of legitimate business and attract investors.
In Plain English
Imagine you have a lemonade stand and want to make it look super popular. You ask your friends to pretend they bought a lot of lemonade, even though they didn't really pay. You even give your friends money to 'pay' you, so it looks like real sales. This makes your stand seem like it's making tons of money, convincing other people to invest in it.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- The Goal: Inflate Revenue Joseph Neal Sanberg, a co-founder of Aspiration Partners, Inc., wanted to make the company's revenue look much higher than it was. This was especially important between January 2021 and December 2022 when the company was trying to go public through a SPAC merger.
- Recruiting 'Customers' Sanberg recruited friends, associates, and even some organizations to act as customers for Aspiration's reforestation services. These individuals and groups had no real intention of paying for the services.
- Signing Sham Agreements These recruited 'customers' signed 'letters of intent' (LOIs) or similar agreements. These documents promised payments ranging from $25,000 to $750,000 on a recurring basis for reforestation services.
- Creating the Illusion of Payment To make the sham LOIs appear legitimate, Sanberg secretly paid the initial obligations for these 'customers.' He did this by sending funds directly to the LOI customers or to an entity that would then transfer the money to Aspiration, often in ways designed to avoid detection.
- Recognizing Fake Revenue Aspiration then recognized the amounts promised in these sham LOIs as actual revenue. This created a false appearance of 'explosive growth' for the company, even though the revenue was not genuinely earned.
- Misleading Investors Sanberg used these inflated revenue figures to raise over $300 million from investors. He also made false and misleading statements to investors, describing the LOI customers as 'recurring, sticky and value-add.'
- Hiding the Scheme Sanberg used his influence as a co-founder and board member to limit Aspiration employees' access to the LOI customers. This helped prevent them from discovering that the customers had no intention of paying and that Sanberg was secretly covering their obligations.
- Uncollected Receivables Grow Even after Sanberg stopped paying the LOI customers' obligations, Aspiration continued to recognize the amounts on the LOIs as revenue. This resulted in a growing balance of uncollected and aging receivables, a clear sign of the fraudulent revenue recognition.
The Enforcement Action
The SEC charged Joseph Neal Sanberg with violating securities laws. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and an officer-and-director bar. In a parallel action, the U.S. Attorney’s Office for the Central District of California and the U.S. Department of Justice announced criminal charges against Sanberg.
Named in this action: Joseph Neal Sanberg.