Federal court temporarily shuts down scheme that has operated for years under various names
 

As a result of a Federal Trade Commission lawsuit, a federal court has temporarily shut down the operations of a business opportunity scam that has taken more than $12 million from consumers with false promises of big returns selling goods through Amazon and Walmart.

According to a complaint filed by the FTC, since at least 2022, the scheme operated under the names Lunar Capital Ventures, Ecom Genie and Profitable Automation, and before that as the now-dissolved company Valiant Consultants Inc. Under each of these names, the scheme has made enticing but bogus claims that consumers could earn lavish profits by paying tens of thousands of dollars to start online e-commerce businesses. The promised earnings rarely, if ever, materialize, and most consumers lose substantial amounts of money.

“At a time when consumers are increasingly looking online for opportunities to supplement their income, this scheme made grand promises of guaranteed passive income,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Instead, the scheme’s operators took millions of dollars, lined their own pockets, and left consumers with debt and stress. Through its actions, the FTC is holding them accountable for the significant injury they have caused.”

The FTC’s complaint alleges that the scheme’s operators used social media ads, websites, and marketing emails to tout the supposed success of their clients, claiming they make tens of thousands of dollars a month selling products through online stores on ecommerce platforms. In online marketing and in claims made directly to consumers going back as far as 2019, the scheme’s operators have claimed consumers can generate sales of “$100K+ per month” and that their businesses could become “million-dollar” operations.

Consumers were charged tens of thousands of dollars to open their online stores, at times cashing in savings and retirement accounts, only to find that they made no money at all and lost all of their initial investment, according to the complaint. The complaint notes that in 2020, when the scheme was operating under the name Valiant, the company and its owner, Steven Mayer, faced numerous complaints and lawsuits from consumers who had lost thousands of dollars to the fraudulent business opportunity. In 2022, with Valiant labeled a scam by many consumers and in litigation, the company reorganized as Lunar. Although the public face of Lunar was a man known as Boba Milic, Mayer effectively ran the company, as he later described, “behind the scenes.” Lunar sold virtually the same business opportunity previously offered by Valiant.

Lunar continued making similarly inflated income claims. Lunar’s sales representative Wessam Baiz, also named as a defendant in the complaint, told at least one prospect that he could expect to earn $60,000 to $70,000 in the first year, “it’ll start doubling up from there,” and “the sky’s the limit.” The complaint alleges, however, that consumers still frequently reported a gap between what the company promised and what it delivered. After paying between $30,000 and $35,000 for their stores, consumers faced lag times of months for stores to be opened and inventory that they paid additional thousands for never appeared in their stores.

In the face of yet another round of consumer complaints and lawsuits, in 2023 Lunar disappeared and Mayer turned to pitching another ecommerce scheme under the name Ecom Genie, which featured similar claims as Valiant and Lunar. In one promotional video, the company claimed that one of its supposed clients—who in reality was an Ecom Genie employee—“has done over [$]1.2 million in sales so far in the last five months and growing monthly. My profits are now around [$]22,000 per month.”

According to the FTC complaint, in addition to Ecom Genie, the scheme also appears to operate under the name Profitable Automation. That company makes nearly identical pitches to Ecom Genie’s pitches and funnels the vast majority of its income into Ecom Genie’s bank accounts.

The FTC’s complaint charges that in every iteration of the scheme, Mayer and the companies he controls have deceived consumers and also failed to provide them with the disclosures required by the FTC’s Business Opportunity Rule – disclosures that would have made clear the nature of Mayer’s previous iterations of the scheme and provided transparency to the prospective purchasers about the viability of the scheme’s earnings claims.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Southern District of Florida.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The staff attorneys on this matter are Sara Tonnesen and Molly Rucki of the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission works to promote competition and protect and educate consumers.  The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.