Aspiration co-founder sentenced to 14 years for $248 million carbon offset fraud scheme

Joseph Sanberg, co-founder of sustainability fintech Aspiration, was sentenced to 14 years in prison for defrauding investors and lenders of at least $248 million. The scheme involved fake carbon offset and tree planting services, where Sanberg booked fraudulent letters of intent as revenue to inflate the company's financials and raise over $300 million from investors. The case highlights risks in the voluntary carbon market, where verification of offset projects is critical. Aspiration's auditor KPMG resigned in 2022 citing fraud concerns, and the SEC later found that fake revenue accounted for $44 million of Aspiration's reported $100.6 million in 2021 revenue. The fraud used California's clean energy policies as cover, with fake customers including a footwear company and a synagogue that had no need for large scale carbon offsets.