A federal court has temporarily halted the operations of a deceptive e-commerce business opportunity scam that allegedly swindled consumers out of more than $12 million.
Operations were halted following a lawsuit filed by the Federal Trade Commission (FTC).
According to the FTC, the fraudulent scheme, operating under names such as Lunar Capital Ventures, Ecom Genie, and Profitable Automation, lured individuals with false promises of substantial profits by selling goods through Amazon and Walmart.
The scams are dated as far back as 2019.
“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, filed in the U.S. District Court for the Southern District of Florida, outlines how the scam targeted consumers through enticing ads on social media, websites, and email campaigns.
Advertisements claimed that consumers could earn “$100K+ per month” and build “million-dollar” businesses by paying tens of thousands of dollars to set up online stores on e-commerce platforms.
However, the promised earnings often failed to materialize, with most consumers losing significant sums of money after making large initial investments.
The complaint traces the roots of the scheme back to an earlier entity, Valiant Consultants Inc., led by Steven Mayer.
After Valiant dissolved amid consumer complaints and legal troubles, the scheme re-emerged under the name Lunar Capital Ventures in 2022.
Mayer allegedly ran the operation “behind the scenes” while Wessam Baiz, a sales representative, assured potential customers.
They would earn between $60,000 to $70,000 in the first year.
However, reports indicate that consumers continued to face issues, including long delays in setting up stores and missing inventory.
In 2023, as complaints mounted, the company resurfaced again, this time under the name Ecom Genie, with similar inflated claims of success.
Marketing materials even showcased supposed testimonials from satisfied clients—one of whom was later revealed to be an Ecom Genie employee.
The FTC’s lawsuit contends that Mayer and his associated companies violated the FTC’s Business Opportunity Rule by failing to disclose required information that would have alerted consumers to the dubious nature of the business and its earnings claims.
The FTC’s 5-0 vote to file the complaint reflects its ongoing commitment to combating fraudulent schemes that exploit consumer trust.
Consumers who fell victim to the scheme were often charged between $30,000 and $35,000, sometimes draining savings or retirement funds, only to find that promised returns were nonexistent.
In some cases, stores took months to launch, and purchased inventory never appeared in their online storefronts.
The FTC is seeking to permanently shut down the operation, prevent future deceptive practices, and recover funds for affected consumers.
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.