Joe Sanberg, co-founder of Aspiration Partners, an “eco-friendly” bank that turned to carbon trading, pleaded guilty this week to a US$248 million scheme to defraud investors.
Sanberg pleaded guilty in Los Angeles federal court to two counts of wire fraud. Sentencing is scheduled for 23 February 2026. He could face a sentence of up to 40 years in jail.
Aspiration Partners was incorporated in 2013 in the tax haven of Delaware. The environmentally conscious digital bank allowed customers to invest their money pay what they thought was fair. But the fine print revealed a base fee of 0.5%.
Aspiration advertised its investment as sustainable and green. But Aspiration’s Redwood Fund bought shares in Big Polluters such as Southwest Airlines as well as MSA Safety — which sells equipment to the oil and gas industry.
And the Redwood Fund was run by UBS, one of the biggest investors in fossil fuels in the world.
Aspiration raised almost US$600 million from investors including Leonardo DiCaprio, Drake, Cindy Crawford, Robert Downey Jr., and Steve Ballmer.
The Clippers sponsorship deal
Shortly before the 2021 National Basketball Association season, Steve Ballmer, former CEO of Microsoft and owner of the Los Angeles Clippers, announced a US$300 million deal with Aspiration. Ballmer said, “Aspiration becoming our first founding partner supports the stake we are planting in the ground to make Intuit Dome the most sustainable arena in the world.” Under the deal Aspiration was supposed to supply carbon credits until 2043.
By the time construction of the Intuit Dome was finished, Aspiration was no longer a sponsor.
Aspiration also signed a US$28 million endorsement deal with Clippers player Kawhi Leonard. The NBA is now investigating whether the deal was a way of getting around the NBA’s salary cap rules. Under the deal, Leonard had to do precisely nothing.
The SPAC
In 2021, Aspiration set up a deal to go public via a special purpose acquisition company (SPAC) called InterPrivate III Financial Partners. The deal would bring in US$400 million and value Aspiration at US$2.3 billion.
But the stock market fell in 2022 and SPACs became unpopular. 180 SPACs were cancelled. And downloads of Aspiration’s app fell dramatically. Sanberg started to falsify financial documents and set up a series of fake deals that he has now admitted defrauded investors of US$248 million.
The carbon credits
At around this time, Aspiration started its shift towards carbon credits. In 2021, Aspiration earned US$56 million from carbon credit sales compared to US$29 million from digital banking. In October 2021, the company launched Aspiration Zero, a credit card “built to fight the climate crisis”. Aspiration claimed that using the card once a day “can offset the average American’s entire carbon footprint”.
Aspiration claimed to buy carbon credits from “large scale, high impact, high quality carbon projects, largely focused on the nature-based side of the equation”.
Little information was available about exactly which carbon credits Aspiration bought. But a post on the company’s website listed two extremely controversial projects: the Northern Kenya Grassland Carbon project; and the Mai Ndombe REDD project in the Democratic Republic of Congo.
A report by Survival International found serious problems with the Northern Kenya Grassland Carbon project. The changes introduced by the project have serious impacts on the traditional grazing patterns of the Indigenous communities living in the project area. Survival International highlighted problems with additionality, an inflated baseline, monitoring of leakage and a failure to carry out a process of free, prior and informed consent with the Indigenous Peoples before the project started.
The Mai Ndombe REDD project also started without the free, prior and informed consent of the people living there. The baseline is “dubious”. Deforestation increased after the project started. Local communities have seen few, if any, benefits from the project.
In addition, Aspiration bought credits from a wind power project in India. These are junk credits. Ratings agency Calyx Global gave the project its lowest possible score.
So much for “high quality” carbon projects.
The CFTC investigation and Trump
In January 2024, Bloomberg reported that the Commodity Futures Trading Commission started an investigation “into whether Aspiration misled customers about the quality of carbon offsets it was selling”.
Under Donald Trump’s fascist regime, however, the CFTC has sacked 15% of its staff and stopped one-third of its investigations. Bloomberg recently spoke to two dozen former CFTC insiders and industry players who described “ a regulator in disarray”.
Trump and his family, of course, have huge interests in profiting from his crypto coins. And very little interest in any sort of meaningful regulation.
The chances of CFTC following up on its investigation of Aspiration’s carbon offsets seem slim.
The two co-founders of Aspiration, Joe Sanberg and Andrei Cherny are enthusiastic supporters of the Democrat party. But this is unlikely to interest Trumps.
Trump, no doubt, lumps carbon offsets together with wind and solar power as part of the climate change “con job”. He’s right that carbon offsets are a con job. But regulating carbon offsets would upset Trump’s supporters in the oil industry, who are hell bent on profiting from planetary destruction, while claiming to care about the climate crisis because they are buying carbon offsets.