AI Affiliate Marketing Scam: FTC Alleges Lavish Lifestyle Funded by Deception
FTC Targets E-commerce Fraudsters in Luxurious Lifestyle Scheme
The Federal Trade Commission (FTC) has set its sights on John and Roman Cresto, accusing them of orchestrating a scheme that allegedly swindled customers out of tens of thousands of dollars.
The FTC’s pursuit comes as a response to the brothers’ purported defrauding of individuals through an ongoing e-commerce training and management venture.
The Cresto brothers are alleged to have promised customers e-commerce expertise, particularly in navigating platforms like Amazon and Walmart, but ultimately failed to fulfill these promises, leaving customers grappling with financial distress.
Their extravagant lifestyle, showcased through social media posts of luxury vacations and high-end cars, has raised suspicions about the source of their wealth.
Deceptive Profits: The Rise and Fall of the Cresto Brothers’ Empire
John and Roman Cresto capitalized on the growing trend of e-commerce by positioning themselves as authorities capable of teaching ordinary consumers and investors the secrets of succeeding on Amazon and Walmart, for a hefty fee.
Their flashy online presence, which flaunted their lavish lifestyle, created a facade of success that now faces scrutiny from federal regulators.
The FTC’s actions reflect its determination to combat misleading e-commerce consulting firms, which often target consumers and budding online businesses.
The emergence of a thriving industry, often referred to as “coaches” or “gurus,” capitalizing on the transition of retail to online spaces, has raised concerns about deceptive practices.
These consultants claim to share their e-commerce success stories, offering expensive courses with no guaranteed outcomes.
As part of its response, the FTC has requested a temporary ban on the Cresto brothers’ business operations.
Misleading Promises and Financial Impact
The FTC’s legal filing in the U.S. District Court for the Southern District of California reveals damning allegations against the Cresto brothers.
Operating under the names of companies like Empire Ecommerce, they promised to expertly manage automated online stores on Amazon and Walmart.
However, they allegedly failed to deliver, charging customers initial investments ranging from $10,000 to $125,000, with additional working capital fees of $15,000 to $80,000.
Moreover, the brothers reportedly claimed a 35% share of profits from the e-commerce stores they managed.
The FTC claims that by June 2022, less than 10% of Empire-managed stores generated sales.
By October 2022, many Amazon stores were suspended or terminated due to policy violations.
Walmart’s marketplace also saw a majority of Empire’s storefronts either inactive or terminated.
Affiliate Marketing Scheme: A Web of Deception
Despite these setbacks, the FTC alleges that Empire continued to fabricate success stories to entice new clients.
The company purportedly recruited affiliate marketers to promote its automation services, using splashy videos claiming substantial passive income.
Through this scheme, Empire attracted over 60 new clients, collecting more than $1.5 million in commission fees.
The FTC asserts that these clients faced substantial financial losses, with few achieving the advertised results.
Luxurious Lifestyle Unveiled
As the FTC investigation delved deeper, it uncovered a trail of extravagant spending by the Cresto brothers.
Their alleged ill-gotten gains funded high-end cars, opulent vacations, and even a luxury wedding in Italy.
Such revelations further fuel suspicions surrounding the true nature of their business.
Evolving Schemes and Legal Battles
Apparently not concerned by the scrutiny, the Cresto brothers launched a new venture called Automators AI, focusing on teaching consumers how to use artificial intelligence for online selling.
The FTC alleges that this venture is an ongoing part of their deceptive activities, defrauding customers of tens of thousands of dollars.
While Amazon expressed support for the FTC’s case, Walmart remained tight-lipped about the allegations.
An Exit Strategy: More Trouble for the Crestos
As the FTC’s investigation progressed, the Cresto brothers sought to offload their business to another individual, Daniel Cohen.
Cohen, however, alleges that he was deceived by the brothers and is now pursuing legal action against them.
The lawsuit sheds light on a web of deception, alleging that the Crestos misled Cohen about the true state of their business while using him as a scapegoat.
In this intricate tale of deception, the Cresto brothers’ apparent success story has unraveled, revealing a trail of financial distress and shattered promises.
The FTC’s pursuit shows the agency’s dedication to unearthing deceptive practices and protecting consumers from fraudulent schemes.
The case serves as a reminder to exercise caution and seek reliable resources when navigating the dynamic world of e-commerce.
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