FTC Temorarily Shuts Down Onyx And Empire Distributions

September 12, 2023 ·

WEST HOLLYWOOD—On August 22, the Federal Trade Commission announced the temporary shutdown of an investment for profit, a business scheme that reportedly lured consumers to invest upwards of $22 million in online stores, using unfounded claims about income and profits.

The operators: Roman Cresto, John Cresto, and Andrew Chapman claim to use Artificial Intelligence (AI) to ensure success and profitability for consumers who invested with the Automators.

“In addition to offering consumers high return as ‘passive investors’ in profitable e-stores, Automators, which previously used the names Empire and Onyx Distribution, also offered to teach consumers how to successfully set up and manage e-stores themselves using a ‘proven system’ and the powers of artificial intelligence,” the FTC stated.

According to their website, Onyx and Empire Distribution centers had multiple locations throughout southern California. The complaint indicates the defendants violated the FTC Act, the Business Opportunity Rule, and the Consumer Review Fairness Act and requested that the court permanently shut down the company’s operations.

The Commission voted 3-0 authorizing the staff to file the complaint in the U.S. District Court for the Southern District of California. The court entered a temporary restraining order against the defendants on August 11, 2023.

“The defendants preyed on consumers looking to provide their families with promises of high returns and the use of AI to power such returns. Their lies caused consumers to lose tens of thousands of dollars, with many losing their life savings. The FTC is working to hold defendants accountable and to secure redress for their victims,” said Samuel Levin, Director of the FTC’s Bureau of Consumer Protection.

The FTC warned the public about using companies that use this money-bilking scheme indicating if the seller is a legitimate company, they should be able to provide the consumer with the following information from the FTC Consumer Advice section of their website.

A copy of the disclosure document is legally required of them which should include, the identity of the seller, information on any lawsuits against the seller, terms, conditions, and availability of a cancellation policy, a list of references, and if the seller indicated profits earned from their business practices, they should be able to provide the consumer with an Earnings Claim Statement.

This is not the first complaint filed against Cresto. According to the Court Listener, on December 8, 2022, he was accused of fraud by Daniel Cohen of LLC Enterprises LLC. It appears the case may accrue some fines and was withdrawn. By September 1, 2023, the hearings were withdrawn.

By Sharon

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