Despite the suspensions, Empire for years continued to falsely promote the success of its Amazon businesses by recruiting affiliate marketers to post splashy videos online claiming they made"significant passive income" through Empire's automation services. Empire was able to lure more than 60 new clients through this affiliate marketing scheme and netted over $1.5 million in commission fees, the FTC alleged.
At the beginning of this year, after selling Empire, the Crestos spun up a new business called Automators AI, which claims to teach consumers how to use artificial intelligence to become online sellers making"over $10,000 per month in sales," and use popular AI chatbot ChatGPT to create customer service scripts, the FTC alleges. The scheme is ongoing, and defrauding consumers of tens of thousands of dollars each, according to the FTC.
Cohen told CNBC in an interview that the Crestos first messaged him via Instagram and that they met over Zoom later that month. John Cresto assured Cohen in that Zoom meeting that Empire was not facing any litigation or major concerns, beyond a"couple" unhappy clients. Cohen agreed to buy the Crestos' business on November 7, wiring them $100,000 the following day. Two days later, the Crestos revealed five ongoing"legal disputes" being handled by their defense firm, Stubbs Alderton and Markiles.