Amazon AI scammers blew millions on Lake Como wedding and cars, FTC alleges
Lake Como in northern Italy’s Lombardy region.
Westend61 | Westend61 | Getty Images
John and Roman Cresto made millions of dollars selling themselves as e-commerce “experts” who could teach regular consumers and investors the secret to selling success on Amazon and Walmart, for a price.
They splashed lavish vacations and high-end cars across their social media account, creating a multimillion-dollar image of success that federal regulators now say was fueled by falsehoods and deception.
The case is the latest example of the Federal Trade Commission cracking down on deceptive e-commerce consultancies that target consumers and fledgling online businesses. A robust industry of consultants and agencies, often referred to as “coaches” or “gurus,” have emerged as retailers increasingly move online and marketplaces on sites such as Amazon and Walmart flourish. These coaches often claim to have struck it rich in e-commerce and will pass along their expertise to users who pay for expensive courses with no guarantee of success.
The FTC on Tuesday asked a judge to bar the Cresto brothers from doing business temporarily, in connection with a lawsuit the agency filed earlier this month in U.S. District Court for the Southern District of California.
The Cresto brothers “promised to expertly manage the operations of automated online stores” on both Amazon and Walmart through their companies, including Empire Ecommerce, doing everything from finding products to fulfilling orders, the complaint says. They charged consumers anywhere from $10,000 to $125,000 for the initial investment, and $15,000 to $80,000 in additional funding as working capital, the FTC alleged.
The Cresto brothers also took 35% of any profits from their “partners'” e-commerce stores, the complaint says. By June 2022, less than 10% of Empire-managed stores generated sales, the FTC alleged. By October 2022, Amazon had either suspended or terminated most of those stores for violating its policies around intellectual property and a business method called dropshipping, where companies never actually have the inventory they’re selling, and instead order products through a manufacturer after a shopper makes a purchase, the complaint says. The majority of Empire’s storefronts on Walmart’s marketplace were either never activated or terminated for policy violations, according to the FTC.
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.
“In truth, most of Empire’s clients lost money and virtually none made the advertised amounts,” the agency wrote in its complaint.
The suspensions left Empire’s clients deeply in debt, the FTC alleged, “because Empire typically had its clients pay for inventory on credit cards.” Empire refused to refund victims tens of thousands of dollars that victims had paid out to Empire or for goods sold, the FTC alleged.
The two brothers made more than $22 million from their clients, the FTC alleged.
The millions that the Crestos diverted for themselves were spent on high-end cars, vacations and even a luxury wedding in Italy, according to the FTC complaint and social media posts.
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 alleged. The scheme is ongoing and defrauding consumers of tens of thousands of dollars, according to the FTC.
Amazon and Walmart did not immediately respond to CNBC’s requests for comment.
A fire sale exit
As the clock ran down on Empire’s alleged fraudulent behavior, the Cresto brothers attempted to pawn off their businesses to another operator, Daniel Cohen.
Cohen is now suing the Crestos, alleging that they deceived him about the true state of the business and used him to deflect blame from themselves.
In October 2022 — the same month the FTC alleged most of Empire’s working Amazon stores had been suspended — the Cresto brothers approached Cohen, a Florida businessman, about buying their empire. Roman Cresto showed projections that suggested his business was strong and highly profitable.
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” of unhappy clients.
“It was something I asked them, because I do know this industry,” Cohen told CNBC. The Crestos also offered him projections that claimed Empire collected up to 50% of profit from the thousands of stores they supposedly operated.
“I’m not sure where they got their projections from,” Cohen told CNBC. “Maybe at some point they did have a store that performed well, and maybe they just used that result for everybody, but I believe most of it was likely made up.”
Cohen agreed to buy the Crestos’ business Nov. 7, 2022, 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 & Markiles.
“I paid Roman 490k total for 6 stores … between LLC set-ups/fees, credit card feeding, virtual store fees, their software on several that they told me would push my stores to the top, etc, etc, they scammed me for well over $525k total,” one email from a client read, according to Cohen’s lawsuit.
Dozens more complaints were languishing in an inbox, detailing alleged negligence or “shady” dealings by the Cresto brothers.
“I paid you guys $65k for a experienced store. Since starting my store has done no where near the projections. Now my store has stopped having any sales at all. I need to know why this is and what happened. I am starting to feel like I was scammed and I need to get my lawyer involved,” read another email cited in Cohen’s lawsuit.
Cohen also told CNBC that Stubbs Alderton & Markiles agreed to serve as his law firm, before firing him as a client and telling Cohen that they would now represent the Cresto brothers.
“From a moral perspective. It just doesn’t smell right,” Cohen’s present attorney, Nima Tahmassebi, told CNBC.
Attorneys at Stubbs Alderton & Markiles did not respond to CNBC’s inquiries about their handling of the cases. The Cresto brothers did not respond to CNBC’s request for comment.
Microsoft pushed back on a report Wednesday that the company lowered growth targets for artificial intelligence software sales after many of its salespeople missed those goals in the last fiscal year.
The company’s stock sank more than 2% on The Information report.
A Microsoft spokesperson said the company has not lowered sales quotas or targets for its salespeople.
The sales lag occurred for Microsoft’s Foundry product, an Azure enterprise platform where companies can build and manage AI agents, according to The Information, which cited two salespeople in Azure’s cloud unit.
AI agents can carry out a series of actions for a user or organization autonomously.
Less than a fifth of salespeople in one U.S. Azure unit met the Foundry sales growth target of 50%, according to The Information.
In another unit, the quota was set to double Foundry sales, The Information reported. The quota was dropped to 50% after most salespeople didn’t meet it.
In a statement, the company said the news outlet inaccurately combined the concepts of growth and quotas.
“Aggregate sales quotas for AI products have not been lowered, as we informed them prior to publication,” a Microsoft Spokesperson said.
The AI boom has presented opportunities for businesses to add efficiencies and streamline tasks, with the companies that build these agents touting the power of the tools to take on work and allow workers to do more.
OpenAI, Google, Anthropic, Salesforce, Amazon and others all have their own tools to create and manage these AI assistants.
But the adoption of these tools by traditional businesses hasn’t seen the same surge as other parts of the AI ecosystem.
The Information noted AI adoption struggles at private equity firm Carlyle last year, in which the tools wouldn’t reliably connect data from other places. The company later reduced how much it spent on the tools.
Read the full story from The Information here.
Waymo partners with Uber to bring robotaxi service to Atlanta and Austin.
Uber Technologies Inc.
Waymo on Wednesday said humans will begin test driving the Alphabet-owned company’s robotaxi vehicles in Baltimore, Pittsburgh and St. Louis.
The three cities represent the latest additions to Waymo’s quickly growing list of cities where the Google sister company is either operating its robotaxis, planning to launch service or starting to test its vehicles. That list now stands at 26 markets.
Waymo will begin manual drives in the trio of new cities this week with hopes to eventually begin serving fully-autonomous rides there, spokesperson Ethan Teicher told CNBC.
Over the past month, Waymo has been aggressively making announcements for new markets and developments at the Google sister company. This comes as tech rivals Amazon and Tesla made advancements in the robotaxi market in 2025. Amazon’s Zoox began offering free rides in Las Vegas and San Francisco, and Tesla this year launched ride-hailing service with human supervisors in the Austin and San Francisco markets.
In November, Waymo announced that it will soon begin manually driving in Minneapolis, Tampa and New Orleans. The company also added Houston, San Antonio and Orlando to its list of cities where it’ll launch service in 2026. Waymo also began offering rides on freeways in the San Francisco, Los Angeles and Phoenix markets, and it named a new finance chief.
With more than 250,000 weekly paid trips, Waymo’s robotaxi service currently operates in Austin, the San Francisco Bay Area, Phoenix, Atlanta and Los Angeles markets. The company in May said it had provided more than 10 million paid rides since launching in 2020.
The new cities further signal that Waymo is increasingly confident its service can work well in locations with colder weather conditions.
Technology
Security startup Verkada hits $5.8 billion valuation in latest funding round led by CapitalG
Filip Kaliszan, CEO of Verkada.
Courtesy: Verkada
Security technology startup Verkada has reached a $5.8 billion valuation after a new funding round led by CapitalG, Alphabet’s venture capital arm, announced Wednesday.
“I think Google saw the opportunity with us in the application of AI and everything we’re driving to apply AI to the physical security industry,” CEO Filip Kaliszan told CNBC’s Deirdre Bosa.
The company said in a release that the investment will be used to bolster its artificial intelligence capabilities and provide liquidity.
The financing totaled $100 million, a person familiar with the terms of the round told CNBC, raising the company’s valuation by $1.3 billion from its Series E funding in February. The person asked not to be named in order to discuss details of the funding.
CapitalG also recently contributed to a $435 million fundraise for cybersecurity startup Armis in November.
The new funding comes as Verkada surpasses $1 billion in annualized bookings across 30,000 customers globally.
The company develops physical security products, including cameras, alarms and sensors, that are connected under a single cloud-based software platform.
Kaliszan said his company serves a broad span of businesses, such as retailers, government properties, schools, and transportation.
For example, TeraWatt Infrastructure, which supplies charging sites to electric vehicles like Google’s Waymo, uses Verkada technology to protect EV facilities.
In September, the company rolled out over 60 new AI features and platform updates, including tools like “AI-Powered Unified Timeline.”
The tool can automatically synthesize videos and images from several cameras into a single visual timeline, rather than requiring security teams to dig through multiple videos during an investigation.
“The genius of Filip and the team of Verkada is that they’re leveraging AI as a Rosetta Stone to really help unlock insights from cameras to help companies become safer and more efficient,” CapitalG general partner Derek Zanutto told Bosa.
By capturing over 20 million images per hour, Verkada can provide notable data like foot traffic, occupancy rates, security violations and other trends, Zanutto said.
He added that the physical security is a sleeping $60 billion market that is led by legacy hardware like “cameras that just record, not cameras that think” — a gap that Verkada is hoping to fill.
However, AI-powered technology will not necessarily replace human security guards any time soon.
“I think humans will be providing security to other humans for as long as I can think,” Kaliszan said. “But AI can empower these first responders to be more aware, to have situational knowledge, to know what to do, and in some cases, actually prevent the problems from happening.”
He pointed to the Louvre heist in October, where multiple crown jewels were robbed from the museum, as an opportunity where AI-assisted devices that could actively monitor, then immediately alert security forces, would be more effective than only physical personnel.
“If you could intervene right then, if you could know in real time that that’s happening, the potential for savings and preventing damage is tremendous,” he said.
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