The Federal Trade Commission (FTC) cracked down a group of affiliate marketers who ensnared consumers into a fraud business coaching program called My Online Business Education (MOBE).
On Thursday, the FTC announced that charges have been filed against the affiliate marketers namely Michael Giannulis and Michael Williams along with their companies BPO USA LLC, Pixx Media LLC, and MyEcomClub Express.
In the complaint, the Commission alleged that the defendants sold to consumers worthless membership packages from MOBE. The defendant’s sales agents who purported to be business coaches claimed that they could teach consumers how to start and grow their online business to make a substantial income.
The consumers deceived by the defendants paid thousands of dollars for the online business coaching scheme. Giannulis and Williams through their companies bilked more than $30 million from their victims.
The Commission also filed complaints against Steven Bransfield and his companies SB & A Media, SB&A Group, and Werunads; Gar Leong Chow and his company TTZ Media, and Scott Zuckman and his firm Alpha Quad Enterprises.
In the lawsuit, the SEC alleged that the defendants operated high-ranking affiliates of the MOBE scheme. Since 2013, they lured tens of thousands of consumers and defrauded them more than $300 million.
MOBE victims suffered substantial losses, experienced crippling debts
The consumers who purchased the MOBE’s online business coaching program “suffered devastating financial losses or crippling debt” contrary to the affiliate marketer’s claim that they would generate significant income, according to the FTC.
In a statement, FTC Bureau of Consumer Protection Director Andrew Smith said, “These so-called ‘affiliates’ helped MOBE swindle consumers out of millions of dollars by making outlandish and false earnings claims. Affiliates should take note that the FTC will hold you personally and financially accountable for false or unsubstantiated marketing claims.”
Affiliate marketers agreed to settle FTC charges
The defendants agreed to pay FTC a monetary judgment to settle the charges against them.
Defendant Chow and TTZ Media accepted the Commission’s order requiring him to pay $3.35 million in monetary judgment.
On the other hand, Giannulis, Williams and their companies agreed to the FTC order requiring them to a $31.6 million monetary judgment, which will be suspended once they pay $760,000 and turnover personal items obtained from their participation in MOBE.
Meanwhile, Bransfield and his companies consented to the FTC order imposing a $4.7 million monetary judgment, which was suspended due to their inability to pay. In August 2019, the defendants filed for Chapter 11 bankruptcy.
Defendant Zuckman and his company agreed to the Commission’s order requiring a monetary judgment of $1.8 million, which will be suspended upon his payment of $406, 150. The suspension of the monetary judgment was due to the defendant’s inability to pay.
All of the settling defendants also agreed to permanently stop selling or marketing any business coaching program and money-making method.
In February, the primary culprits behind MOBE agreed to pay more than $17 million to settle the FTC’s lawsuit.