# The 'AI-powered' store that lost its investors everything: the FTC banned Automators AI and entered a $21.7M judgment

> The FTC sued Automators AI, a business-opportunity scheme that sold 'done-for-you' Amazon and Walmart storefronts marketed as powered by proprietary 'AI machine learning'. The agency alleged the AI-driven earnings claims were baseless and the scheme lured consumers to invest $22 million; a February 2024 stipulated final order imposed a total monetary judgment of $21,765,902.65 and a lifetime ban on the operators selling e-commerce business opportunities or coaching.

- Verification status: verified
- Case type: deployment
- Provider: Automators AI (formerly Empire Ecommerce / Onyx Distribution) - marketed 'AI machine learning' that would run and maximise revenue for consumers' online stores
- Client: Automators AI and operators Roman Cresto, John Cresto and Andrew Chapman (defendants), E-commerce business-opportunity / online-store automation (named)
- Sector: retail / US / cross
- Canonical URL: https://theinternetninja.com/stories/ftc-automators-ai-ecommerce-scheme-cresto-21-7m-judgment-lifetime-ban-2024/
- Source: The Internet Ninja (theinternetninja.com), independent verified-proof platform

## Outcomes

| Metric | Before | After |
| --- | --- | --- |
| Consumer money taken in on the AI-earnings claims |  |  |
| What the 'AI' actually delivered |  |  |
| Settlement judgment |  |  |
| Ban |  |  |

## Verification method

Every figure quoted verbatim from FTC primary releases (the August 2023 complaint/TRO announcement and the February 2024 stipulated-final-order announcement), each retrieved this session from its Wayback capture because live ftc.gov refuses automated fetchers, and stored in sources/. The August 2023 allegations are independently corroborated by WWD/Sourcing Journal (23 August 2023); the $21,765,902.65 judgment and the ban are independently corroborated by the court-entered stipulated order (Dkt. #98, No. 3:23-cv-01444, S.D. Cal.), signed by Chief District Judge Dana M. Sabraw on 26 February 2024, retrieved from CourtListener/RECAP and durably archived on the Internet Archive. Presented as FTC allegations and as the terms of a negotiated settlement, not an adjudicated finding of fraud.

## Full case file

**Verification status: CHECKING — handed to the checker, not yet graduated. NOT verified. The $22 million figure and the deceptive-AI characterisation are ALLEGATIONS in the FTC's complaint; the $21,765,902.65 judgment and the lifetime ban are the terms of a negotiated (stipulated) settlement, not a litigated finding of liability.**

## The problem

"Passive investment income" was the pitch: pay Automators AI to build and run an Amazon or Walmart storefront, and its proprietary "AI machine learning" would find products, fulfil orders and maximise revenue while the buyer sat back ([source](https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-action-stops-business-opportunity-scheme-promised-its-ai-boosted-tools-would-power-high-earnings)). The company, which previously operated under the names Empire Ecommerce and Onyx Distribution, also sold coaching that promised to teach consumers "how to successfully set up and manage e-stores themselves using a 'proven system' and the powers of artificial intelligence" ([source](https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-action-stops-business-opportunity-scheme-promised-its-ai-boosted-tools-would-power-high-earnings)). On a lawsuit brought by the Federal Trade Commission, a federal court temporarily shut the scheme down in August 2023 ([source](https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-action-stops-business-opportunity-scheme-promised-its-ai-boosted-tools-would-power-high-earnings)). This is a verified negative: a public record of what a federal regulator charged, and how the case resolved, about the gap between an "AI-powered" earnings pitch and the returns it produced.

## What was claimed

The operators sold the AI as the engine of the returns. The FTC's complaint quotes the pitch directly: "Defendants claimed to use 'AI machine learning' to maximize revenues, such as 'We've recently discovered how to use AI tools for our 1 on 1 Amazon coaching program, helping students achieve over $10,000/month in sales!'" ([source](https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-action-stops-business-opportunity-scheme-promised-its-ai-boosted-tools-would-power-high-earnings)). The scheme charged people between $10,000 and $125,000 up front for a "done-for-you" store, alongside lavish projections such as "$4k-$6k consistently monthly net profit" and "$200k in one month and 100% ROI (return on investment) in 8 months" ([source](https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-action-stops-business-opportunity-scheme-promised-its-ai-boosted-tools-would-power-high-earnings)). An independent trade report by WWD/Sourcing Journal recorded the same claims, noting the defendants "made 'baseless' claims about the power of their AI tools, promising that one-on-one coaching sessions would help consumers generate over $10,000 per month in sales" ([source](https://wwd.com/sourcing-journal/industry-news/ftc-automators-ai-ecommerce-walmart-amazon-fraud-technology-1238821354/)).

## What the FTC alleged actually happened

According to the FTC, the AI-driven promises were unfounded: "the vast majority of the defendants' clients did not make the promised earnings or even recoup their sizable investment" ([source](https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-ban-owners-automators-ai-e-commerce-money-making-scheme)). Instead, "most lost significant amounts of money, and Amazon and Walmart routinely suspended, blocked, or terminated the stores that defendants operated for their clients for repeated policy violations" ([source](https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-ban-owners-automators-ai-e-commerce-money-making-scheme)). The FTC's Bureau of Consumer Protection director, Samuel Levine, framed the AI itself as the lure: "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" ([source](https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-ban-owners-automators-ai-e-commerce-money-making-scheme)). When buyers complained about their losses, the FTC alleged, they were offered new storefronts rather than refunds and were pressured to sign non-disparagement agreements barring negative reviews ([source](https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-action-stops-business-opportunity-scheme-promised-its-ai-boosted-tools-would-power-high-earnings)).

## The outcome

The scale of the money is stated in the FTC's lawsuit: the scheme "lured consumers to invest $22 million in online stores, using unfounded claims about income and profits" ([source](https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-action-stops-business-opportunity-scheme-promised-its-ai-boosted-tools-would-power-high-earnings)). WWD/Sourcing Journal independently reported the same figure, that consumers invested "a collective $22 million" in stores on Amazon.com and Walmart.com ([source](https://wwd.com/sourcing-journal/industry-news/ftc-automators-ai-ecommerce-walmart-amazon-fraud-technology-1238821354/)). In February 2024 the case resolved by a stipulated final order that "contain[s] a total monetary judgment of $21,765,902.65, which is partially suspended based on the defendants' inability to pay the full amount" ([source](https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-ban-owners-automators-ai-e-commerce-money-making-scheme)). That figure is corroborated by the court-entered order itself, independent of the FTC as plaintiff: the stipulated order signed by Chief District Judge Dana M. Sabraw on 26 February 2024 (Dkt. #98, No. 3:23-cv-01444, S.D. Cal.) enters "Judgment in the amount of Twenty-One Million Seven Hundred and Sixty-Five Thousand Nine Hundred and Two Dollars and Sixty-Five Cents ($21,765,902.65) ... in favor of the Commission against Defendants and Relief Defendant, jointly and severally, as equitable monetary relief" ([source](https://www.courtlistener.com/docket/67715443/98/federal-trade-commission-v-automators-llc/)). The same order permanently restrains and enjoins Automators AI, Roman Cresto and John Cresto, among others, from "advertising, marketing, distributing, promoting, or offering for sale ... any Business Opportunity involving the management or operation of e-commerce" ([source](https://www.courtlistener.com/docket/67715443/98/federal-trade-commission-v-automators-llc/)). The order also imposed a lifetime ban: each defendant other than Andrew Chapman and his company Pelenea Ventures, LLC "will be permanently banned from offering business opportunities or coaching services related to managing online marketplace e-commerce platforms," and all defendants are barred from making deceptive earnings claims and from enforcing contract terms that stopped customers leaving negative reviews ([source](https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-ban-owners-automators-ai-e-commerce-money-making-scheme)). The FTC filed the order in the U.S. District Court for the Southern District of California on a 3-0 Commission vote ([source](https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-ban-owners-automators-ai-e-commerce-money-making-scheme)).

## Why this matters for buyers

The case is a clean instance of the pattern TIN's verification model exists to catch: "AI" invoked as the reason a product will perform, with no evidence behind the number and heavy pressure not to publish a bad review. The tell here was structural, not technical. The AI claim was quantitative and specific ("over $10,000/month in sales") but attached to no measured, independently checkable result, and the contracts actively suppressed the one signal a buyer relies on: what earlier customers actually experienced. Before you trust an "AI-powered" outcome, ask for the measured result on real accounts, from a source that is not the seller, and treat a non-disparagement clause as a reason to walk, not a formality.

## How this was verified

Method: every figure ("$22 million"; "$21,765,902.65"; the "$10,000/month" AI claim; the $10,000-$125,000 investment range) was quoted verbatim from two FTC primary releases, the August 2023 complaint/TRO announcement and the February 2024 stipulated-final-order announcement, retrieved 27 August 2026 from their Wayback captures (dated 22 August 2023 and 16 March 2026 respectively) because live ftc.gov refuses automated fetchers, and archived into sources/. The August 2023 allegations were independently corroborated against a reputable trade outlet, WWD/Sourcing Journal (Kate Nishimura, 23 August 2023). The $21,765,902.65 judgment and the e-commerce ban were then corroborated against the court-entered stipulated order itself (Dkt. #98, No. 3:23-cv-01444, S.D. Cal.), signed by Chief District Judge Dana M. Sabraw on 26 February 2024 and retrieved this session from CourtListener/RECAP, with a durable copy on the Internet Archive: the judiciary is a source independent of the FTC as the plaintiff, so that figure no longer rests on the FTC's word alone. Weakest-link honesty: the $22 million consumer-investment figure is a Tier-1 primary but is stated as the FTC's own allegation in its complaint, corroborated by one Tier-2 trade outlet (WWD/Sourcing Journal); it is the softest load-bearing claim here. And a structural limit applies to the whole page: the $22 million and the "deceptive AI" characterisation are the FTC's allegations, while the judgment and ban are the terms of a negotiated settlement, not a litigated finding of liability, so the defendants did not necessarily admit the conduct. This is a verified record of what the FTC charged and how the case settled, not a court's finding of fraud.

## Related case files

- [The FTC's Ascend Ecom case: the same "AI-powered" online-store business-opportunity model, banned with a $25M judgment](/stories/ftc-ascend-ecom-ai-business-opportunity-25m-judgment-court-ordered-ban-2025/) — the closest analog, the sibling enforcement action in the same sweep.
- [The FTC's DoNotPay order over "the world's first robot lawyer"](/stories/ftc-donotpay-worlds-first-robot-lawyer-193000-deceptive-ai-claims-2025/) — the same agency acting on an overstated AI-capability claim in a different market.
- [The SEC's Presto order: a "voice AI" drive-thru that needed a human on most orders](/stories/sec-ai-washing-presto-automation-voice-ai-drive-thru-human-agents-cease-and-desist-2025/) — AI-washing where the automation rate itself was the misrepresentation.

## Sources

1. Federal Trade Commission · "FTC Action Leads to Ban for Owners of Automators AI E-Commerce Money-Making Scheme" (settlement / stipulated final order) · 27 February 2024 · **Tier 1 (primary, federal settlement announcement)** · https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-ban-owners-automators-ai-e-commerce-money-making-scheme (archived: http://web.archive.org/web/20260316153645/https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-action-leads-ban-owners-automators-ai-e-commerce-money-making-scheme)
2. Federal Trade Commission · "FTC Action Stops Business Opportunity Scheme That Promised Its AI-Boosted Tools Would Power High Earnings Through Online Stores" (complaint / TRO) · 22 August 2023 · **Tier 1 (primary, federal complaint announcement)** · https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-action-stops-business-opportunity-scheme-promised-its-ai-boosted-tools-would-power-high-earnings (archived: http://web.archive.org/web/20230822150828/https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-action-stops-business-opportunity-scheme-promised-its-ai-boosted-tools-would-power-high-earnings)
3. WWD / Sourcing Journal · Kate Nishimura, "FTC Cracks Down on $22 Million Fraud Linked to Walmart, Amazon Marketplace" · 23 August 2023 · **Tier 2 (independent reputable trade press)** · https://wwd.com/sourcing-journal/industry-news/ftc-automators-ai-ecommerce-walmart-amazon-fraud-technology-1238821354/ (archived: Save-Page-Now returned 302/async at retrieval; local copy retained in sources/)
4. U.S. District Court, Southern District of California · Stipulated Order for Permanent Injunction and Monetary Judgment, *FTC v. Automators LLC*, No. 3:23-cv-01444-DMS-BGS, Dkt. #98, signed by Chief District Judge Dana M. Sabraw · 26 February 2024 · **Tier 1 (primary, court-entered judicial order, independent of the FTC as plaintiff)** · https://www.courtlistener.com/docket/67715443/98/federal-trade-commission-v-automators-llc/ (archived: https://archive.org/download/gov.uscourts.casd.765384/gov.uscourts.casd.765384.98.0.pdf; local copy in sources/04-court-stipulated-order-dkt98-2024-02-26.pdf)