Pillsbury, Partner Accused of Aiding $145 Million Fraud (1)

International law firm Pillsbury Winthrop and one of its California-based partners allegedly helped defraud an investment arm of UBS Asset Management of $145 million, according to a lawsuit filed in a Manhattan court.

Pillsbury partner Riaz Karamali worked with Joseph Sanberg, co-founder of a celebrity-backed climate-finance startup, and venture capitalist Ibrahim AlHusseini to create and send “dozens of fake financials” to secure two loans from Clover Private Credit Opportunities Origination II LP, the investment fund alleges in its complaint filed Tuesday in the New York County Supreme Court.

Clover says it was “lied to and deceived” by Karamali, Sanberg, and AlHusseini as part of a scheme that the Federal Bureau of Investigation described last year as a “case about greed and abuse of trust,” in a US Justice Department announcement of criminal charges filed against Sanberg

“Karamali and Pillsbury directly participated in nearly all aspects of the scheme, including by helping AlHusseini avoid paying the judgment,” Clover says.

“The claims against Pillsbury and Mr. Karamali are frivolous and lack any merit. We will vigorously defend ourselves in court,” the New York-based Pillsbury Winthrop Shaw Pittman LLP said.

Sanberg, whose Los Angeles-based Aspiration Partners was once backed by Leonardo DiCaprio and other A-list celebrities, was sentenced Monday to 14 years in prison after he admitted to defrauding multiple investors and lenders.

AlHusseini pleaded guilty to a single count of wire fraud in March 2025 but has not yet been sentenced.

Hatching a Scheme

Despite garnering buzz around Aspiration in 2019, the company wasn’t profitable, Clover says. Company leadership spent “lavishly,” and Sanberg “was strapped for money.” He needed a new loan from Clover to pay of an existing $20 million loan from Emigrant Bank, according to the complaint.

Sanberg wrote to Clover’s investment manager, O’Connor Alternative Investments LLC, seeking a $50 million deal to purchase more shares in Aspiration. After weeks of negotiations, O’Connor agreed to a final loan of $55 million with a $6 million so-called put premium in which a third party—in this case AlHusseini—was obligated to purchase 10.3 million shares in Aspiration and be responsible should Sanberg default on the loan.

AlHusseini’s lawyer was Karamali, which allowed Sanberg to use the prestige of the firm and the partner “to push the scheme through,” Clover says. But AlHusseini “was nearly broke” and Karamali knew it, according to the complaint.

Karamali allegedly helped Sanberg and AlHusseini fabricate proof of their financials to secure the loan from O’Connor.

“It was critical to the fraud that Pillsbury speak on AlHusseini’s and Sanberg’s behalf, given the firm’s reputation,” the complaint says.

AlHusseini and Sanberg used Clover’s funds, obtained through fraud, to pay down money owed to Pillsbury, according to the suit.

Clover wants a jury trial to determine compensatory damages. The fund is represented by Kobre & Kim LLP.

The case is Clover Private Credit Opportunities Origination (Levered) II LP v. Pillsbury Winthrop Shaw Pittman LLP, N.Y. Sup. Ct., docket number unavailable, complaint 6/2/26.