The Federal Trade Commission's crackdown on deceptive e-commerce consultancies targeting consumers and fledgling online businesses is exemplified by this case. John and Roman Cresto posed as e-commerce "experts, " promising to reveal the secrets of selling success on Amazon and Walmart for a fee. They flaunted their extravagant lifestyles on social media, projecting an image of multimillion-dollar success that federal regulators now claim was built on lies and deceit. The FTC has taken legal action to temporarily bar the Cresto brothers from conducting business, following a lawsuit filed earlier this month in the Southern District of California. These false e-commerce consultants, referred to as "coaches" or "gurus, " have emerged as retailers increasingly transition online and marketplaces like Amazon and Walmart thrive. They often sell expensive courses with no guarantee of success, claiming to have achieved great wealth in e-commerce. The FTC alleges that the Cresto brothers' companies, including Empire Ecommerce, promised to expertly manage automated online stores on both Amazon and Walmart. They charged consumers between $10, 000 and $125, 000 for the initial investment, as well as additional funding of $15, 000 to $80, 000 for working capital. Additionally, they took 35% of any profits from their clients' e-commerce stores. The FTC claims that by June 2022, less than 10% of Empire-managed stores generated sales, resulting in most of the stores being suspended or terminated by Amazon due to policy violations. A majority of Empire's storefronts on Walmart's marketplace were either never activated or terminated for policy violations as well.

Despite these suspensions, Empire continued to falsely advertise its success by recruiting affiliate marketers who posted videos online claiming to have made significant passive income through Empire's automation services. Through this scheme, Empire managed to attract over 60 new clients and earned over $1. 5 million in commission fees. However, most of Empire's clients did not achieve the advertised amounts of success and instead suffered financial losses. The FTC also alleges that Empire left its clients in significant debt because they were required to pay for inventory on credit cards. The Cresto brothers allegedly made more than $22 million from their clients, which they used to fund their lavish lifestyles, including luxury cars, vacations, and even a wedding in Italy. After selling Empire, the Cresto brothers started a new enterprise called Automators AI, which the FTC alleges defrauds consumers by claiming to teach them how to use artificial intelligence to become successful online sellers. This ongoing scheme has reportedly resulted in consumers losing tens of thousands of dollars. Despite the fraudulent behavior of Empire, the Cresto brothers attempted to transfer their businesses to another operator, Daniel Cohen, who is now suing them for deception and using him as a scapegoat. Cohen claims that the Cresto brothers misled him about the true state of the business. Despite facing legal disputes and numerous complaints of negligence, the Cresto brothers continued to operate their fraudulent schemes, with their defense firm also eventually representing them instead of Cohen. The Cresto brothers and their legal representatives did not respond to CNBC's requests for comment.