Aspiration Digital-Banking Fraud Case Widens as Tieks CEO Is Accused of Recruiting Fake Clients

Aspiration, a digital bank focused on sustainable finance, entered bankruptcy proceedings after becoming embroiled in a revenue-fraud case. Its co-founder has been sentenced to 14 years in prison for fraud. The case centers on whether the company used sham contracts to inflate revenue and mislead investors and creditors, with implications for recoveries by the bankruptcy estate and the liability of other people involved.

New filings in a Los Angeles bankruptcy court accuse Tieks CEO Kfir Gavrieli of using friends, family and social networks to recruit fake clients to sign contracts with Aspiration, artificially increasing its reported revenue. The filings did not disclose the total value of the contracts. The court is scheduled to hold a hearing on the new allegations on May 12.