Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC secures $25 million settlement against Ascend Ecom for allegedly defrauding consumers with false AI business claims, (Jun 26, 2025)

By George Basharis, J.D.

Federal regulators ban e-commerce business opportunity operators from industry after alleging they used misleading “cutting edge” AI promises to bilk consumers out of millions.

The Federal Trade Commission announced it has reached a settlement with the operators of Ascend Ecom, an online business opportunity scheme that allegedly defrauded consumers of at least $25 million through false promises about AI-powered tools that would generate thousands of dollars in monthly passive income. Under the terms of a proposed court order filed in the U.S. District Court for the Central District of California, William Michael Basta and Jeremy Kenneth Leung, along with their corporate entities, will be permanently banned from selling business opportunities and required to turn over substantial assets to compensate affected consumers (FTC v. Ascend CapVentures Inc., FTC File No. 242 3023, No. 2:24-cv-07660-SPG-JPR (C.D. Cal. June 23, 2025)).

Allegations of deceptive AI claims. According to the FTC complaint, Ascend Ecom and its owners falsely claimed their “cutting edge” artificial intelligence-powered tools would help consumers quickly earn thousands of dollars a month in passive income through e-commerce operations. The scheme allegedly charged consumers tens of thousands of dollars to open storefronts through major online retailers but failed to deliver on the promised income.

“Consumers looking to start a new business should never have to wade through waves of false information and deceptive promises of easy money,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The FTC is on the lookout for fraudulent actors, and when we find them, we'll stop them.”

The operation functioned under multiple business names, including Ascend Ecom, Ascend Ecommerce, Ascend CapVentures, ACV Partners, ACV, Accelerated eCom Ventures, Ethix Capital by Ascend, and ACV Nexus, according to the FTC.

Part of broader AI enforcement initiative. The Ascend Ecom settlement represents one of five enforcement actions announced as part of the FTC’s new “Operation AI Comply” initiative, which targets companies using artificial intelligence to engage in deceptive or unfair practices. The broader enforcement sweep includes cases against DoNotPay for falsely marketing itself as the “world’s first robot lawyer,” Ecommerce Empire Builders for promising consumers an “AI-powered Ecommerce Empire,” Rytr for providing tools to generate fake consumer reviews, and FBA Machine for guaranteeing income through AI-powered online storefronts.

“Using AI tools to trick, mislead, or defraud people is illegal,” said FTC Chair Lina M. Khan. “The FTC’s enforcement actions make clear that there is no AI exemption from the laws on the books.”

Settlement terms. The proposed settlement order imposes sweeping restrictions on the defendants and requires significant asset forfeiture. The defendants are permanently banned from selling or marketing any business opportunity or business coaching products and services. They are also prohibited from making misleading or unsubstantiated earnings claims and from deceiving consumers about any product or service they sell.

The order specifically prohibits the defendants from misrepresenting that their products or services will use artificial intelligence to maximize revenues or otherwise enhance profitability or effectiveness. This provision directly addresses the AI-related claims that allegedly formed the core of their deceptive marketing strategy.

The settlement also prohibits the defendants from including or enforcing contract provisions that restrict consumers’ ability to file complaints or reviews about their experiences—a practice the FTC says Ascend used to silence harmed customers.

Asset forfeiture and property liquidation. Under the monetary judgment provisions, William Basta must liquidate real property located in Seminole, Florida, titled in the name of 89CLTV LLC, which Basta solely owns and controls. The order gives him just seven days from its entry to begin liquidation proceedings and requires all proceeds to be paid to the FTC.

The defendants must also surrender control of numerous business assets to a court-appointed receiver, including funds in accounts belonging to the corporate entities, cash held by the receiver, and various real and personal property. Additionally, they must cooperate with the receiver’s efforts to liquidate real property in Venice, California.

The settlement order details an extensive list of frozen bank accounts across multiple financial institutions that must transfer their funds to the Commission. These include accounts at Bank of America, Apex Fintech Solutions, Choice Bank, Crypto.com, Metropolitan Commercial Bank, Navy Federal Credit Union, PayPal, and others, with funds totaling the $25 million judgment amount.

Suspended judgment based on financial disclosures. The $25 million monetary judgment is partially suspended based on the defendants’ claimed inability to pay the full amount. However, the suspension is contingent on the truthfulness and completeness of extensive financial statements and documentation the defendants provided to the Commission during the litigation process.

The settlement documents detail more than two dozen categories of financial disclosures submitted by the defendants, including depositions, tax returns, wage statements, corporate financial forms, bank account records, and property documentation. If the FTC later discovers that the defendants lied about their financial status, the full $25 million judgment becomes immediately payable.

Consumer protection and data restrictions. The order includes strong consumer protection provisions requiring the defendants to provide sufficient customer information to enable efficient administration of consumer redress. They are permanently prohibited from selling, renting, or otherwise disclosing personal and financial information of consumers obtained through their business operations. The defendants must also destroy all customer information in their possession within 30 days of receiving written direction from the FTC, except as required by law enforcement requests.

Ongoing monitoring and compliance requirements. The settlement establishes comprehensive compliance monitoring and reporting requirements lasting up to 10 years. The defendants must submit annual compliance reports detailing their business activities and demonstrating adherence to the order's provisions. They must also notify the FTC within 14 days of any changes to their business structures or activities.

The FTC retains broad authority to monitor compliance, including the right to conduct depositions, request additional documentation, and interview employees or associates of the defendants. The order also permits FTC representatives to pose as consumers or other entities when investigating potential violations.

Receivership termination and asset distribution. The court-appointed receivership will remain in effect until terminated by further court order, with the receiver required to complete all duties within 180 days. The receiver must file a final report detailing steps taken to dissolve the receivership estate and distribute remaining funds to the FTC for consumer redress purposes. Any funds not used for direct consumer redress may be applied to related relief measures as determined by the FTC, with unused money ultimately deposited to the U.S. Treasury.

The Case is No. 2:24-cv-07660-SPG-JPR.

Judge: Garnett, S.

Attorneys: Jody Goodman for the FTC. Karl S. Kronenberger (Kronenberger Rosenfeld, LLP) for Ascend CapVentures Inc.

Companies: Ascend CapVentures Inc.

News: ConsumerProtection AINews FederalTradeCommissionNews CaliforniaNews