John and Roman Cresto, who portrayed themselves as e-commerce “experts,” are facing legal action from the Federal Trade Commission (FTC) for allegedly running a deceptive scheme that promised consumers and budding online businesses the secret to success on platforms like Amazon and Walmart in exchange for hefty fees. The FTC has asked a judge to temporarily bar the Cresto brothers from conducting business due to the lawsuit.
Operating through companies like Empire Ecommerce, the Cresto brothers claimed they could expertly manage automated online stores on Amazon and Walmart, offering services from product sourcing to order fulfillment. They charged customers between $10,000 and $125,000 for the initial investment, with additional working capital costs ranging from $15,000 to $80,000.
The FTC alleges that the Cresto brothers misrepresented their abilities, exaggerated the profitability of their client’s businesses, and failed to deliver on their promises. Despite their claims of success, most Empire-managed stores experienced sales drops, and many were suspended by Amazon due to policy violations. Empire’s clients were left in debt, as they were often required to pay for inventory using credit cards.
The Cresto brothers reportedly made over $22 million from their clients, using the funds for luxury cars, vacations, and even an opulent wedding. After selling Empire, they started a new venture called Automators AI, which also faces allegations of fraud and misleading claims about potential earnings.
This case is part of the FTC’s broader efforts to combat deceptive e-commerce consultancies, often referred to as “coaches” or “gurus,” that capitalize on the growing online marketplace trend. Such consultants often promise to share their e-commerce success secrets for a substantial fee but frequently fail to deliver meaningful results to their clients. This situation emphasizes the importance of vigilance when considering online business coaching services and the need for regulatory intervention to protect consumers and fledgling businesses from such fraudulent schemes.