FTC Moves to Ban Creators of Automators AI, formerly known as Empire Ecommerce, and Onyx Distribution For E-Commerce Money-Making Scheme

In a lawsuit filed in August 2023, the FTC alleged that Roman Cresto, John Cresto, and Andrew Chapman, in conjunction with various entities under their control such as Automators AI, Empire Ecommerce, and Onyx Distribution, misled customers by making baseless assurances of generating "passive investment income" through ecommerce platforms supposedly driven by AI.

The individuals behind a money-making operation that falsely claimed to utilize artificial intelligence to enhance profits for online retail businesses have agreed to forfeit millions in assets to resolve the FTC's lawsuit against them. Moreover, all the companies and two of their proprietors are now permanently prohibited from peddling business opportunities or coaching programs related to ecommerce ventures.

In a lawsuit filed in August 2023, the FTC alleged that Roman Cresto, John Cresto, and Andrew Chapman, in conjunction with various entities under their control such as Automators AI, Empire Ecommerce, and Onyx Distribution, misled customers by making baseless assurances of generating "passive investment income" through ecommerce platforms supposedly driven by AI.

“The defendants lured consumers into investing millions in online stores supposedly powered by artificial intelligence and made empty promises that they could coach consumers into achieving success and profitability,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s action holds the defendants accountable for this scheme by banning them from the coaching business, barring bogus claims, and requiring redress to defrauded consumers.”

The FTC's complaint alleged that the defendants promised customers lucrative profits from successful e-commerce stores. Additionally, they claimed to provide guidance on creating and running e-stores on major platforms like Amazon and Walmart through a "proven system" and artificial intelligence technology.

The FTC claimed that most of the defendants' customers did not achieve the expected earnings or recover their substantial investment. In fact, many ended up losing a significant sum of money, leading Amazon and Walmart to frequently suspend, block, or shut down the stores managed by the defendants due to repeated policy breaches.

The settlement order includes a number of requirements:

1. Permanently barred from offering business opportunities or coaching for e-commerce platforms: All defendants except Chapman and his company, Pelenea Ventures, LLC, will be permanently prohibited from providing business opportunities or coaching services related to managing e-commerce platforms on online marketplaces.

2. Prohibition on making misleading earnings claims: The ruling would also forbid all defendants from making misleading earnings claims and would mandate that they substantiate any earnings claims they make in the future with evidence.

3. Prohibition on suppressing negative reviews: The ruling would additionally prevent all defendants from enforcing clauses in their contracts that restrict customers from posting negative reviews about their businesses or including such clauses in future contracts.

4. Surrender of assets: The rulings would compel the defendants to relinquish their claims to assets currently held by the receiver in the case, as well as the contents of multiple bank and cryptocurrency accounts. These assets, valued at millions of dollars, will be utilized by the FTC to reimburse affected consumers.

The total monetary judgment in the orders is $21,765,902.65, with a partial suspension due to the defendants' financial constraints. If they are caught lying about their finances, the full amount becomes immediately payable. The stipulated final order was approved by a 3-0 vote from the Commission and filed in the U.S. District Court for the Southern District of California. Remember, once signed by the District Court judge, these orders carry the force of law. Colleen Robbins, Christopher E. Brown, and Frances Kern from the FTC's Bureau of Consumer Protection are the staff attorneys handling this case.

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