From Amazon Achievements to Walmart Woes: The Cresto Brothers' Luxury Lifestyle Under Scrutiny

John and Roman Cresto, while showcasing a flashy lifestyle of luxury and prosperity, portrayed themselves as e-commerce maestros with the knack to guide others toward significant success on platforms like Amazon.Com Inc AMZN and Walmart Inc WMT. However, recent developments suggest their claimed opulence reflected deceit and misrepresentation.

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Recent investigations reveal an alarming trend in the e-commerce sector, with numerous consultants branding themselves as "e-commerce gurus" who have purportedly tasted success and are willing to share their "secrets" with anyone willing to pay hefty amounts for their courses. 

The recent case of the Cresto brothers brings this concern to the forefront, CNBC reports.

The Federal Trade Commission (FTC) is clamping down on misleading e-commerce consultancies. Earlier in August, the FTC launched a lawsuit in the U.S. District Court for the Southern District of California to temporarily halt the Cresto brothers' operations.

The Crestos, via their companies like Empire Ecommerce, asserted their ability to manage online stores on Amazon and Walmart proficiently. Clients coughed up from $10,000 - $125,000 as an initial outlay and further amounts as working capital. 

While they took a considerable 35% cut from their partners' e-commerce profits, the FTC findings reveal that most Empire-managed outlets hardly made any sales.

By October 2022, Amazon had either suspended or terminated most of the Empire-managed stores due to policy violations, particularly related to intellectual property and the dropshipping business model. Similar issues arose with Empire's presence on Walmart's platform.

Regardless of these setbacks, Empire continued its misleading marketing strategies. 

By roping in affiliate marketers who flaunted their "substantial passive income" through videos, Empire attracted over 60 clients and amassed more than $1.5 million in commissions. However, the grim reality was that most of these clients faced financial losses.

The Cresto brothers, having allegedly pocketed over $22 million from their clients, displayed their wealth openly. 

Extravagant cars, lavish holidays, and even a grand wedding in Italy were funded by these proceeds, as evidenced by FTC findings and various social media glimpses.

After parting ways with Empire earlier this year, the Crestos initiated a new enterprise named Automators AI. This venture claims to educate consumers on utilizing artificial intelligence for online selling, boasting potential earnings surpassing $10,000 monthly. 

Their promotional strategies also involve using popular AI chatbots like ChatGPT for crafting customer service scripts.

In a twist, as Empire's operations became increasingly contentious, the Cresto brothers attempted a hasty exit by selling their business to Daniel Cohen. Cohen, however, is now legally challenging the Crestos, accusing them of misrepresenting the actual health of the company and using him as a scapegoat.

Price Action: AMZN shares traded higher by 0.41% at $134.80 premarket on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.