Multi-Million Dollar Scam That Fooled Aspiring Entrepreneurs Busted by the FTC – What You Need to Know

Multi-Million Dollar Scam That Fooled Aspiring Entrepreneurs Busted by the FTC – What You Need to Know

In recent news, the Federal Trade Commission (“FTC”) has successfully intervened in a fraudulent business opportunity scheme that has defrauded consumers out of over $12 million. This scheme, which operated under several names including Lunar Capital Ventures, Ecom Genie, and Profitable Automation, has been misleading hopeful entrepreneurs with false promises of substantial income from online selling businesses. The FTC’s action has temporarily shut down the operation, putting an end to its years of deceptive practices.

The scam first emerged in 2019 under the name Valiant Consultants Inc., and its operators made extravagant claims, luring consumers with promises of earning tens of thousands of dollars a month selling products through major e-commerce platforms such as Amazon and Walmart. Victims were encouraged to invest large sums, sometimes upwards of $30,000 to $35,000, under the guise of starting their own online stores. However, the promised earnings never materialized, and many consumers found themselves empty-handed, having lost their initial investments.

Despite consumer complaints and lawsuits in 2020, the scheme continued under the name Lunar Capital Ventures in 2022, with Steven Mayer, the man behind the operation, continuing to deceive consumers. Even though the public face of Lunar was a man named Boba Milic, Mayer was running the company behind the scenes. Lunar perpetuated the same inflated income claims as its predecessor, offering unrealistic expectations about earning $60,000 to $70,000 in the first year alone, followed by exponential growth. Unfortunately, for many consumers, these promises were never fulfilled.

In 2023, after facing another wave of lawsuits, the scheme rebranded again as Ecom Genie. The new name did little to change the fraudulent nature of the operation, as it continued to make similar false claims about sales figures and profits. One promotional video claimed a supposed client, who was actually an employee of the company, had earned over $1.2 million in just five months, with monthly profits of $22,000. However, the reality was far different, with most consumers losing everything they invested and receiving little to no return on their money.

The FTC’s complaint also highlights that these companies failed to meet the disclosure requirements under the FTC’s Business Opportunity Rule, which mandates transparency regarding the financial risks involved in such ventures. Instead, the operators of the scheme continued to mislead potential customers, hiding the true nature of their past failures and misrepresenting the likelihood of success.

For business owners and entrepreneurs, this case serves as an important reminder of the significance of transparency, honesty, and proper disclosure in any business venture. Misleading claims can not only lead to financial harm for consumers but can also result in legal consequences for business owners. As the FTC continues to crack down on fraudulent practices, it is essential to ensure that your marketing efforts are accurate, clear, and in compliance with relevant regulations.

If you are considering or planning to offer an online business opportunity, make sure that you provide truthful and transparent information to potential clients. Misleading customers, even unintentionally, can have serious repercussions, not only for your business’s reputation but also for your bottom line.

If you would like to read more about this case and others, visit our Case Studies Library.

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This article is for information purposes only. It is not intended to be and should not be relied on as legal advice for any particular matter.