US Federal Trade Commission (FTC) — Automators AI (and Roman Cresto, John Cresto, Andrew Chapman, Empire Ecommerce, Onyx Distribution)

Decided by

U.S. District Court for the Southern District of California

Parties

Federal Trade Commission v. Roman Cresto, John Cresto, Andrew Chapman, Automators AI, Empire Ecommerce, Onyx Distribution, and Pelenea Ventures, LLC

Remedy

Defendants agreed to turn over millions in assets for consumer refunds, face permanent bans on e-commerce business opportunities or coaching, and are subject to a partially suspended monetary judgment.

Appeal

Appeal status not stated

Key holdings

1. Defendants deceived consumers with false promises of passive investment income from online storefronts allegedly powered by artificial intelligence.

   “deceived consumers with unfounded promises of “passive investment income” in online storefronts supposedly powered by AI.”

2. Most clients lost significant money and faced e-commerce account suspensions due to policy violations.

   “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.”

3. The settlement includes a total monetary judgment exceeding twenty-one million dollars, partially suspended due to inability to pay.

   “The orders contain a total monetary judgment of $21,765,902.65, which is partially suspended based on the defendants’ inability to pay the full amount.”

In plain English

In August 2023, the Federal Trade Commission filed a case charging that Roman Cresto, John Cresto, Andrew Chapman, and their affiliated companies—including Automators AI, Empire Ecommerce, and Onyx Distribution—deceived consumers with false promises of passive investment income from online storefronts supposedly powered by artificial intelligence. The defendants promised high returns and claimed to offer a proven system to help consumers operate successful stores on Amazon and Walmart. However, the FTC alleged that most consumers lost significant money rather than making earnings, and major e-commerce platforms routinely suspended or terminated their storefronts for policy violations. To settle the matter, the FTC approved a stipulated final order by a vote of 3-0, which was filed in the U.S. District Court for the Southern District of California. Under the settlement, the defendants—excluding Chapman and Pelenea Ventures, LLC—face a lifetime ban on offering business opportunities or coaching related to managing e-commerce stores. Furthermore, all defendants are prohibited from making deceptive earnings claims and from contractually restricting customers from posting negative reviews. The settlement imposes a monetary judgment of $21,765,902.65, which is partially suspended based on inability to pay. Defendants are required to surrender millions of dollars in bank and cryptocurrency accounts to provide refunds to affected consumers.