joseph sanberg

Aspiration Partners made a splash when it entered the green investing space in 2013.

The Marina del Rey firm billed itself as a socially conscious online banking company, offering investments and focusing its finances on the climate crisis. It also generated and sold carbon credits meant to help offset greenhouse gas emissions.

Soon, it collected celebrity investors such as Leonardo DiCaprio, Orlando Bloom, Robert Downey Jr., and Steve Ballmer, the former Microsoft chief executive, philanthropist and owner of the Los Angeles Clippers.

But 12 years later, things have turned sour.

Earlier this year, the co-founder and another top company official agreed to plead guilty to wire fraud charges and scheming to bilk investors using falsified documents. Aspiration went bankrupt.

And now, the company is at the center of a NBA investigation into whether a $28-million deal the firm cut with Clippers star Kawhi Leonard was designed to help the team circumvent the league’s salary cap.

The Clippers have strongly denied that, and said neither the team nor Ballmer played any role in Leonard’s deal and that there was no intention to violate any NBA rules. Leonard has also denied any wrongdoing.

In a statement, the Clippers said Ballmer and his family are “focused on sustainability” and built the Clippers’ home arena at the leading edge of environmental design. Aspiration was part of that effort, the statement said, and Ballmer was “duped on the investment and on some parts of this agreement, as were many other investors and employees.”

A review of hundreds of pages of court records offers a window into how the once high-flying green company fell amid illegal dealings and multiple federal criminal investigations.

A company’s rise and fall

Founded by Joseph Sanberg and Andrei Cherny, Aspiration Partners reportedly raised $110 million from venture capital funds in just its first few years of existence.

It came at a moment of rising concern about climate change, and Aspiration seemed to capitalize. Sizable deals rolled in, including a $315-million pact with Oaktree Capital Management and Ballmer.

The firm even partnered with rapper Drake in 2021, using its reforestation program to offset the artist’s estimated climate impact. The company at the time claimed its business partners and customers had funded the planting of 15 million trees over the course of a year.

In September 2021, the Clippers announced a deal with the company as the first “Founding Partner” for its state-of-the-art arena in Inglewood. The idea was fans would be able to offset their carbon impact when buying a ticket to watch the team. Aspiration even bid unsuccessfully for the naming rights to the venue, now known as Intuit Dome.

The partnership, the news release announcing it declared, “set a new standard for social responsibility in sports.”

But behind the cadre of celebrity sponsors and investors, court documents reveal trouble was brewing inside Aspiration.

In 2020, the company explored a potential $55-million loan from an investor fund in exchange for 10.3 million shares of stock, according to federal court filings. But the investor fund wanted a “put option” — a sort of safety net guaranteeing it would be able to sell its stock if Aspiration defaulted on the loan, according to federal complaints.

Sanberg, according to federal prosecutors, turned to Ibrahim Ameen AlHusseini, a venture capitalist and then-board member of Aspiration Partners.

According to a federal criminal complaint, Sanberg was aware AlHusseini didn’t have the funds to cover the “put option.” So he allegedly coordinated with AlHusseini to falsify financial records and inflate AlHusseini’s worth by tens of millions of dollars.

Federal prosecutors allege AlHusseini sent Sanberg a spreadsheet showing his investment portfolio from several years back and told Sanberg the spreadsheet was not accurate but a “hypothetical.”

Sanberg, according to the federal complaint filed against him, revised the spreadsheet to read as if it were from Dec. 31, 2019, and sent it to an investment advisor.

AlHusseini also used a graphic designer from Lebanon to falsify financial documents at least 24 times between April 2020 and February 2023, according to the federal complaint filed against Sanberg. The records sent to the financial advisor made it appear that AlHusseini’s investments and assets were worth more than $200 million, the records show.

But in reality, federal prosecutors allege his Bank of America account balance in September 2021 was $11,556.89. His Fidelity investment accounts, according to court records from federal prosecutors, totaled $2,963.63 at the time.

According to a federal complaint, Sanberg then refinanced the loaned $55 million, securing $145 million from another investment firm, again using a “put option” from AlHusseini. This time, AlHusseini promised to buy the shares for $65 million from that firm if Sanberg defaulted, according to the federal complaint.

AlHusseini did not have the funds to back that deal, federal prosecutors alleged in court papers. But he still banked $6.3 million for his role in securing it, the complaint alleged.

There were other signs the company was in trouble.

Federal prosecutors allege Sanberg moved money from his personal checking account between Aspiration and another one of his companies in March 2022, making it appear on paper as if new investments were coming in.

On Nov. 2, 2022, Sanberg defaulted on the loan, and AlHusseini agreed the following month to boost the put option value to $75 million.

Some contractors began to complain that they were not being paid, according to court filings. Lawsuits followed.

In July 2022, Cherny also notified the company he would step down as chief executive. The day after he and the company signed a separation agreement in October, Sanberg threatened to sue him, according to a letter from Sanberg’s attorneys sent to Cherny.

Cherny would later file suit against Aspiration Partners, alleging the company didn’t pay him the entirety of his severance package agreed to in October 2022, according to a complaint filed in federal court. The suit was settled out of court earlier this year.

Federal prosecutors filed charges against AlHusseini in October 2024. He later agreed to plead guilty to one count of wire fraud, as well as to work with federal authorities in their investigation.

He is expected to appear in court for a sentencing hearing on Feb. 26, according to court filings.

Aspiration Partners filed for bankruptcy in March.

Sanberg originally entered a plea of not guilty to the charges, but in August he agreed to plead guilty to two felony counts of wire fraud, according to federal prosecutors.

Court filings show he is expected in court on Oct. 20 for a change of plea hearing.

An NBA star’s deal

Aspiration cut its deal with Leonard in 2022. Although players are allowed to have separate endorsement and other business deals, the NBA probe is trying to determine whether the Clippers participated in arranging the side deal beyond simply introducing Aspiration executives to Leonard.

The investigation follows information detailed in the “Pablo Torre Finds Out” podcast, which reported that Leonard’s deal amounted to a no-work contract meant to circumvent the NBA’s salary cap rules.

The salary cap limits how much teams can spend on player payroll. It’s meant to ensure talent parity by preventing the league’s wealthiest teams from outspending smaller markets to acquire the best players.

Circumventing the cap by paying a player outside of his contract is strictly prohibited and can be severely punished.

Cherny, in a statement posted on X, disputed that the agreement with Leonard required no work from the basketball star.

“The contract contained three pages of extensive obligations that Leonard had to perform,” Cherny wrote in the Sept. 12 post. “And the contract clearly said that if Leonard did not meet those obligations, Aspiration could terminate the contract.”

In the statement, Cherny said he does not remember any conversations about the NBA’s salary cap when the contract between Leonard and Aspiration was signed.

“There were numerous internal conversations about the various things Aspiration was planning to do with Leonard once the 2022-23 season began, including emails from the marketing team about their plans,” he said.

Cherny declined to be interviewed for this article.

It was Aspiration’s collapse that shed light on the Leonard deal. According to bankruptcy filings, Leonard’s private company, KL2 Aspire, is listed as one of the company’s biggest creditors — being owed $7 million.

The Clippers are, by far, the biggest creditor listed for the company, with more than $30 million in outstanding debt.

In a statement, a spokesperson for the Clippers said the team terminated its relationship with Aspiration during the 2022-23 season, when the company defaulted on the agreement.

Ballmer has said he was duped by Aspiration, and insisted the Clippers followed all NBA rules. He also said he welcomed the investigation.

The Clippers signed Leonard to a four-year, $176-million contract in August 2021. In an interview with ESPN last month, Ballmer said that the sponsorship deal with Aspiration was completed in September 2021 and that the Clippers introduced Leonard to Aspiration two months later.

In a statement, a spokesperson for the Clippers said both the team and Ballmer were unaware of Aspiration’s suspicious dealings.

“Neither the Clippers nor Mr. Ballmer was aware of any improper activity by Aspiration or its co-founder until after the government instituted its investigation,” the statement read. “The team and Mr. Ballmer stand ready to assist law enforcement in any way they can.”

At the heart of the uproar over allegations that Kawhi Leonard of the Los Angeles Clippers received millions in undisclosed payments from a tree-planting startup is a National Basketball Association rule that caps the the total annual payroll for teams.

According to a report by Pablo Torre of the Athletic, bankruptcy documents show that the tree-planting startup Aspiration Partners paid Leonard $21 million — and still owes him another $7 million — after agreeing to a $28 million contract for endorsement and marketing work at the company.

The report claims there is no evidence to show that Leonard did anything for Aspiration Partners, whose initial funding came in large part from Clippers owner Steve Ballmer. Torre alleges that the payment to Leonard was a way to skirt the NBA salary cap and pad his contract.

The Clippers have forcefully denied that they or Ballmer “circumvented the salary cap or engaged in any misconduct related to Aspiration.”

Still, the NBA said it was launching an investigation into the matter.

The salary cap is a dollar amount that limits what teams can spend on player payroll. The number is determined based on a percentage of projected income for the upcoming year. In 2024-25, the salary cap was $140.6 million.

The purpose of the cap is to ensure parity, preventing the wealthiest teams from outspending smaller markets to acquire the best players. Teams that exceed the cap must pay luxury tax penalties that grow increasingly severe. Revenues from the tax penalties are then distributed in part to smaller-market teams and in part to teams that do not exceed the salary cap.

The cap was implemented before the 1984-85 season at a mere $3.6 million. Ten years later, it was $15.9 million, and 10 years after that it had risen to $43.9 million. By the 2014-15 season it was $63.1 million.

The biggest spike came before the 2016-2017 season when it jumped to $94 million because of an influx of revenue from a new nine-year, $24 billion media rights deal with ESPN and TNT.

Salary cap rules negotiated between the NBA and the players’ union are spelled out in the Collective Bargaining Agreement (CBA). Proven incidents of teams circumventing the cap are few, with a violation by the Minnesota Timberwolves in 2000 serving as the most egregious.

The Timberwolves made a secret agreement with free agent and former No. 1 overall draft pick Joe Smith, signing him to a succession of below-market one-year deals in order to enable the team to go over the cap with a huge contract ahead of the 2001-2002 season.

The NBA voided his contract, fined the Timberwolves $3.5 million, and stripped them of five first-round draft picks — two of which were later returned. Also, owner Glen Taylor and general manager Kevin McHale were suspended.

Then-NBA commissioner David Stern told the Minnesota Star-Tribune at the time: “What was done here was a fraud of major proportions. There were no fewer than five undisclosed contracts tightly tucked away, in the hope that they would never see the light of day. … The magnitude of this offense was shocking.”

Current commissioner Adam Silver is just as adamant as Stern when it comes to enforcing salary cap rules, although the current CBA limits punishment.

According to Article 13 of the CBA, if the Clippers were found to have circumvented the cap, it would be a first offense punishable by a $4.5 million fine, one first-round draft pick, and voiding of Leonard’s contract. However, the Clippers don’t have a first-round pick until 2027.

Leonard, one of the Clippers stars, is extremely well compensated. He will have been paid $375,772,011 by NBA teams through the upcoming season, according to industry expert spotrac.com.

A former Aspiration finance department employee whose voice was disguised on Torre’s podcast said that when they noticed the shockingly large fee paid to Leonard, they were told that, “If I had any questions about it, essentially don’t, because it was to circumvent the salary cap, LOL. There was lots of LOL when things were shared.”

Aspiration Partners was a digital bank that promoted socially responsible spending and investments that, at one point, brought in a star-filled roster of investors that included Drake, Robert Downey Jr., and Leonardo DiCaprio. Founded in 2013, it offered investments in “conscious coalition” companies and offered carbon credits to businesses. The company was valued it at $2.3 million at one point.

But in August, the company’s co-founder, Joseph Sanberg, agreed to plead guilty to charges that he defrauded investors and lenders. Federal prosecutors accused Sanberg of causing more than $248 million in losses, calling him a “fraudster.”

Prosecutors alleged that Sanberg and another member of the company’s board, Ibrahim AlHusseini, fraudulently obtained $145 million in loans by promising shares from Sanberg’s stock in the company. AlHusseini allegedly falsified records to inflate his assets to obtain the loans, and Sanberg concealed from investigators that he was the source for revenue that was recognized by the company.

Sanberg had also recruited companies and individuals to claim they would be paying tens of thousands of dollars to have trees planted, but instead Sanberg used legal entities under his control to hide that he was making these payments, not the customers.

Aspiration, which was partially funded by Ballmer with a $50 million investment, filed for bankruptcy in March.

The company was expected to pay more than $300 million over two decades as a sponsor for the Clippers’ Intuit Dome, which opened in August 2024. But before the new arena opened, the Clippers said Aspiration was no longer a sponsor, just as the Justice Department and Commodity Futures Trading Commission began looking into allegations that Aspiration had misled customers and investors.

During Aspiration’s bankruptcy proceedings, documents emerged citing KL2 Aspire as a creditor owed $7 million, one of four yearly payments of that amount agreed upon in a 2022 contract. KL2 is a limited liability company that names Leonard — whose jersey number is 2 — as its manager.

Aspiration was partially funded by a $50-million investment from Ballmer. It is not known whether Ballmer was aware of or played a role in facilitating the employment agreement between Aspiration and Leonard.

The Clippers issued a lengthy statement Thursday, attempting to explain why Leonard being paid by Aspiration was unrelated to his contract with the Clippers.

“There is nothing unusual or untoward about team sponsors doing endorsement deals with players on the same team,” the statement said in part. “Neither Steve nor the Clippers organization had any oversight of Kawhi’s independent endorsement agreement with Aspiration. To say otherwise is flat-out wrong.”

“The Clippers take NBA compliance extremely seriously, fully respect the league’s rules, and welcome its investigation related to Aspiration.”

In his reporting, Torre noted that Leonard’s contract with Aspiration included an unusual clause that said the company could terminate the endorsement agreement if Leonard was no longer a member of the Clippers.

Mark Cuban, part owner of the Dallas Mavericks, took to X.com to suggest that Torre’s reporting was faulty.

‘I’m on Team Ballmer,” Cuban wrote. “As much as I wish they circumvented the salary cap, First Steve isn’t that dumb. If he did try to feed KL money, knowing what was at stake for him personally, and his team, do you think he would let the company go bankrupt ? “

Torre responded by inviting Cuban on his podcast, “Pablo Torre Finds Out.”