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‘Passive Income on Autopilot’

FTC Sues to Stop Alleged Amazon Tricksters Who Ignored Its Warnings

Defendants Kevin David Hulse and David Arnett, operating under an entity called DK Automation, have lured consumers into purchasing business opportunities since at least February 2020, promising to build purchasers a 100% “turnkey Amazon empire” that generates “passive income on autopilot,” alleged an FTC complaint Wednesday (docket 1:22-cv-23760) in U.S. District Court for Southern Florida in Miami.

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Hulse and Arnett “promote themselves as experts with years of experience working with Amazon, offering to build consumers profitable online Amazon businesses under a variety of program names,” said the complaint. They promise to help set up an Amazon store for purchasers of these Amazon programs, identify proven “home run” products, negotiate with suppliers, and order, process and ship inventory to Amazon, it said. “They further promise to expertly manage the Amazon storefront on behalf of purchasers, while Amazon will provide customers for the store.” The defendants launched a cryptocurrency program in January that, in many instances, is bundled with a business opportunity called the Platinum Amazon Automation program, the FTC said.

The defendants’ claims of lucrative potential earnings “are false or unsubstantiated,” said the complaint. “Most purchasers are unlikely to earn the advertised income, and many, if not most, lose money.” The complaint estimates Hulse and Arnett took at least $52 million from program purchasers between 2017 and 2021. Purchasers must agree not to post negative reviews about the programs, it said. The defendants “have threatened or harassed some purchasers for posting negative reviews,” it said. It also appears that at least some of the positive reviews about Hulse and Arnett on popular websites like are “falsified,” it said.

Hulse is aware of complaints from dissatisfied purchasers filed with the Better Business Bureau because he has responded directly to the BBB about such complaints, said the complaint. “He is also aware of the BBB’s and Trustpilot’s concerns about falsified positive reviews and incentives provided for positive reviews.”

Hulse and Arnett typically require purchasers of their Amazon business opportunities to sign an account management service agreement that mandates DK will receive 30% of the net profits of the purchaser’s Amazon store on a monthly basis, said the complaint. After purchasers sign the account agreement and pay the required fees, they soon become liable for additional fees, including payments for opening a limited liability company, for state licensing and for Amazon storage, it said.

The FTC put Hulse and Arnett on notice April 26 that they could be subject to civil penalties for violations of the FTC Act in connection with their marketing claims, said the complaint. The notice warned them “it is an unfair or deceptive trade practice to make false, misleading, or deceptive representations concerning the profits or earnings a participant in a money-making opportunity can expect or to engage in certain acts or practices related to consumer testimonials,” it said. The defendants’ unlawful behavior continued, it said.

DK Automation “ripped off consumers by manipulating reviews and making empty promises of big returns on cryptocurrency investment schemes and bogus business programs," said Samuel Levine, director of the FTC Bureau of Consumer Protection, in a statement Wednesday. "They ignored warnings that these practices were illegal, and now they are paying the price.” Efforts to reach Hulse, also known as Kevin David, and Arnett for comment Thursday were unsuccessful.