Fake Amazon Automation Gurus Settle FTC Case For $21.7 Million
The people behind the “Amazon automation” scam have agreed to settle the case of the Federal Trade Commission (FTC) for millions in assets, the FTC announced on Tuesday. Two of the owners and all of the businesses involved will also be permanently banned from selling business opportunities or coaching programs involving e-commerce stores.
Brothers Roman and John Cresto, Andrew Chapman along with multiple companies they controlled, including Automators AI, Empire Ecommerce, and Onyx Distribution were accused of deceiving consumers with unfounded promises of “passive investment income” in online storefronts supposedly powered by AI.
According to the FTC, the defendants falsely offered high returns from profitable e-commerce stores on platforms like Amazon and Walmart, claiming to possess a “proven system” enhanced by artificial intelligence for setting up and managing these stores.
However, the regulator contended that the majority of clients did not achieve the advertised earnings, with many incurring significant financial losses. The clients’ stores were also frequently subjected to suspensions or terminations by Amazon and Walmart due to policy violations.
The settlement includes several stipulations: a permanent ban against offering business opportunities or coaching related to e-commerce platforms for all defendants except Chapman and his company, Pelenea Ventures, LLC; a ban on making deceptive earnings claims; and a requirement for the defendants to support future earnings claims with evidence. The defendants are prohibited from including clauses in contracts that prevent customers from posting negative reviews.
The defendants are ordered to relinquish various assets, including bank and cryptocurrency accounts, valued at millions of dollars, to facilitate refunds to defrauded consumers. The total monetary judgment is set at $21,765,902.65 – which is partially suspended due to the defendants’ reported inability to pay the full amount.
“If the defendants are found to have lied to the FTC about their financial status, the full judgment would be immediately payable,” the FTC wrote.
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