A federal judge was not convinced that Joe Sanberg was motivated only by a desire to do good when he lied to Aspiration Partners’ lenders and investors.
LOS ANGELES – The co-founder of Aspiration Partners, a Southern California-based, environmentally conscious online bank, was sentenced 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 rejected Joe Sanberg’s request to be spared prison altogether because of his past anti-poverty work and his alleged good intentions in trying to save the struggling bank he helped found in 2013.
“The circumstances of this crime are among the worst I’ve ever come across,” said Wilson, a Ronald Reagan appointee who has served more than 40 years as a federal judge. “This case has touched almost every symbol 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 conspiring with one of Aspiration’s board members to file falsified brokerage statements suggesting that this board member had tens of millions of dollars in liquid assets for him in the event of a collateral failure by San to provide for the post office’s bankruptcy.
While Sanberg told the judge he had to pledge everything he owned to get the loan he needed for Aspiration to meet its payroll amid the Covid-19 pandemic, Wilson noted that the proceeds of the loan were used to pay off one of Sanberg’s previous personal loans, as well as buy back Aspiration stock on his behalf.
“This seems to me to be a personal gain,” the judge said.
In November 2021, Sanberg accepted his plea agreementhe and his accomplice Ibrahim AlHusseini – who has also been charged with fraud – repeated their scheme to get another $145 million from another lender linked to UBS.
Part of this loan went to repay the previous loan while another part was used to buy stock in the Blue Apron food delivery business in Sanberg’s name.
In addition, Sanberg fraudulently increased Aspiration’s income by secretly paying businesses and individuals to enroll in 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 overvaluing the company’s assets by hundreds of millions of dollars. As a result, prosecutors argue, many small investors lost their life savings.
Aspiration filed for bankruptcy protection in 2025, wiping out investors’ stakes in the bank.
“I am deeply sorry for the harm I caused and the terrible judgment I exercised,” Sanberg told the judge. “I wanted Aspiration to succeed so badly that on my seal I made terrible decisions.”
Sanberg was never an executive at the bank and blamed its management for Aspirations’ failure.
His attorney, Marc Mukasey, unsuccessfully pleaded with the judge to spare his client prison time because of his good work in the community over the years, including helping to create the California Earned Income Tax Credit for low-income families.
“A prison sentence is too harsh for the good Joe Sanberg has done in the world and can still do,” the lawyer argued.
Aspiration Partners, among other sustainability initiatives, assured its clients that their money would not be invested in fossil fuel businesses and allowed clients to pool transaction amounts so that the balance could be used to plant trees.
Celebrities including Drake, Leonardo DiCaprio and Los Angeles Clippers owner Steve Ballmer are said to have invested in Aspiration.
Ballmer posted one MeSSAge on X in April, sharing the victim impact statement he filed in court detailing the $60 million he lost through Sanberg’s scheme.
“Five years ago, I invested in Aspiration, a company focused on environmental sustainability, a cause very important to me and my family,” said Ballmer. “Aspiration’s founder, Joe Sanberg, engaged in fraud that injured many and ultimately destroyed the company. I was cheated and felt stupid about it. Everyone who believed in Aspiration, including employees, customers and investors, was also cheated. Everyone is still counting their losses.”
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