Wealth Assistants claimed it would help its clients make money on Amazon. Clients said they ‘lost everything’ instead.
- Wealth Assistants offered to manage Amazon stores in exchange for a minimum investment of $35,000.
- Sixteen investors claimed to have lost money after Wealth Assistants abruptly ceased operations.
- There were legal red flags, and the CEO used TikTok to post videos from his Lamborghini.
Mike Wimmer was already thinking about selling on Amazon when he noticed ads for a company called Wealth Assistants on TikTok.
He wanted an Amazon store because it would provide a second source of income while he worked full-time as an engineer and his wife cared for their two young children, he told Business Insider.
Millions of products are sold by third-party sellers on Amazon’s vast marketplace. These sellers can generate sales by uploading items to a digital store and then optimizing product listings to appear in search results for shoppers. Many sellers use Amazon’s advertising tools to set themselves apart from competitors selling similar products.
When Wimmer researched what it would take to run an Amazon store, he discovered it would be more time-consuming than he had anticipated, with many steps, including sourcing products from China.
Wealth Assistants promised to handle the back-end work. Wealth Assistants would handle all of the nitty-gritty of Amazon success, including sourcing products, handling customer service requests, and storing, packing, and shipping orders using Fulfillment by Amazon, in exchange for an upfront investment and a percentage of the gross income.
Wealth Assistants also stated that if clients did not break even within the first year, they would be reimbursed.
“That helped to ease the risk a little bit because you thought, ‘Well, if they can’t do what they say they’re going to do within a year, they’re going to buy the store back, and I’m not going to be out anything,'” said Wimmer. “That didn’t turn out to be the case.”
BI spoke with 16 people who said they lost money after investing between $35,000 and $100,000 to work with Wealth Assistants. They all made investments within the last 18 months, and the amounts they made varied depending on the percentage of the proceeds they agreed to share with Wealth Assistants.
Some claimed to have invested life savings or funds set aside for family planning. Many were drawn in by a flashy lifestyle promoted by the company’s CEO and founder, Ryan Carroll, as well as the prospect of making money with little effort. Dozens of them have now joined a Discord channel to strategize their next steps.
BI discovered red flags. Max K. Day, one of Carroll’s partners, has been accused of fraud on numerous occasions since 1992, when the Federal Trade Commission ordered his assets frozen for assisting telemarketers in defrauding people who were unable to obtain credit cards. Max O. Day, Day’s nephew, served time in a Texas prison for burglary while also serving as Wealth Assistants’ chief growth officer.
The company went bankrupt last month. Carroll emailed all Wealth Assistants clients on October 13 to inform them that the company had undergone a restructuring, blaming “unprecedented supply chain disruption and store deactivations in an economy likely already in recession.”
“WA also experienced an untimely capital crunch right after our investments into warehouses and facilities after our rapid growth,” it said in the email.
Wealth Assistants announced ten days later that it had laid off approximately 75 employees and planned to close by December 1. No buyback guarantees would be honored. Instead, it provided a list of alternative providers with whom clients could collaborate to manage their accounts if they agreed not to sue Wealth Assistants.
Carroll did not respond to BI’s comment requests. However, on Tuesday evening, he sent a video message to the company’s clients, stating that “rumors” about the company that were circulating online were “not true.” According to him, the company had to pivot due to Amazon’s changes and ran out of runway as payroll and overhead costs soared to more than $1 million per month.
One client was a veteran who put $100,000 of their savings into Wealth Assistants, believing that it would provide them with enough income to support their family after they left the military.
“We thought the business model looked good, and we lost everything,” said this person, who requested anonymity to protect the privacy of their family but whose identity is known to BI. “So many of us are sitting here drowning in the fear of financially crippling our families.” The stress of losing that much money has been crippling.”
‘Where’s my inventory?’
Wealth Assistants’ clients were told there would be a “ramp-up period” while their account managers arranged for inventory to be sold on their digital stores after making an initial investment, forming an LLC, and paying their Amazon seller-account fees.
Clients were sent invoices ranging from $5,000 to $15,000 over the next few weeks, which they were told covered the cost of inventory and provided working capital in case items needed to be restocked quickly.
Wimmer sent the company $55,000 in September 2022, financing the investment with a second mortgage on his home. He agreed to keep 70% of the gross income from his Amazon store, while Wealth Assistants would keep 30%.
He claimed that after several months, his store had only made about $15,000 in sales and had invested an additional $5,000 in inventory. Some items sold well, such as plant food and Ghirardelli’s hot-cocoa powder, while others did not.
Amazon removed a product listing for a pair of batting gloves after customers complained that they were not as described. Wimmer claimed that popular items were not being restocked.
One Pennsylvania client who spoke with BI on the condition of anonymity shared emails and records demonstrating that the company took more than two months after receiving his startup payment to invoice him for inventory — and two months later, it still hadn’t stocked his store.
He was one of five people who told BI that their Amazon stores were never stocked at all. Tina Luk, one of them, claimed she had nothing to show for her $55,000 payment to Wealth Assistants other than an empty store.
Others saw their stores stocked with items such as golf balls and fish food, but their sales never came close to breaking even. Seth Hamilton, who paid $35,000 for a 50% profit share with Wealth Assistants, said he received a cease-and-desist letter from a supplier after selling livestock medicine without authorization.
The company had several hundred clients, according to a former Wealth Assistants employee who spoke on the condition of anonymity because they were not authorized to speak with the press. Another estimate put the figure at 700.
“I would have so many meetings booked per day, and it was the same thing,” the first ex-employee explained. “It was something like, ‘Where’s my inventory?'” When will new inventory arrive in my store? “Why aren’t my products selling?”
Some customers paid significantly more up front to purchase what the company referred to as a “triple A” store. These were Amazon stores that already existed and sold products, so the company marketed them as a faster way to generate sales. Customers paid up to $100,000 for these pre-existing stores.
In June, Andrew Pou paid $75,000 for such a store. He was disappointed when he saw what his store was selling, which included spicy pickles, watermelon-flavored kids toothpaste, and off-brand Pepto Bismol. It only made a few sales.
“The store was just a little shell of what they actually promised,” he told me.
Wealth Assistants’ contracts with its clients appeared to protect itself against unpredictability, stating that outcomes could vary depending on market conditions and changes in third-party algorithms.
Selling customers on the entrepreneur lifestyle
Many Wealth Assistants clients stated that the opportunity to generate passive income drew them in. According to the company’s website, e-commerce stores are a “new asset class” that can “diversify your portfolio.”
Carroll, 27, frequently posted videos on social media flaunting his lavish lifestyle — flying private, dining with Nobu Dallas employees, and purchasing a Lamborghini — and boasting about his business success. He also wrote “Start Scale Exit: How to Start, Build, and Sell a Business While Living the Life of Your Dreams.”
“We had faith in them. “We bought into the hype,” said the veteran who put up $100,000.
Carroll was a real estate agent in California in his early twenties when he posted a video on Facebook about attracting million-dollar clients through Facebook ads. Suzy Arriola, who ran the brokerage where he worked, said in a text message that Carroll didn’t show up and left after a month.
Wealth Assistants began as a drop-shipping company in late 2021, according to three people familiar with the company. This model does not necessitate a large initial investment or the purchase of inventory.
Wealth Assistants ran the risk of jeopardizing its relationship with Amazon, which has implemented increasingly stringent drop-shipping rules. Wealth Assistants pivoted its business model near the end of 2022 to focus on Fulfillment by Amazon, which meant it would have to acquire inventory itself, according to a person familiar with the matter.
The company also required assistance in ensuring that products were properly packaged and delivered to Amazon’s warehouses. It looked into collaborating with third-party logistics providers, such as the $1.2 billion e-commerce platform Cart.com. Wealth Assistants released a YouTube video in March featuring Carroll and Cart.com cofounder Saheb Sabharwal.
Two clients stated that the apparent relationship between Wealth Assistants and Cart.com increased their trust in the former.
In November, a Cart.com representative told BI that the collaboration was a “vendor-client relationship” and that “there is no other relationship between the companies.” According to the representative, Cart.com sent Wealth Assistants a formal notice of termination in the fall after Wealth Assistants stopped paying its invoices earlier in the year.
“We understand that many parties, including Cart.com, have experienced issues in dealing with Wealth Assistants and are unable to receive a response from the company,” the statement read. “Unfortunately, we also have not been able to reach representatives of Wealth Assistants and have no additional information on their status.”
Business associates were accused of fraud and burglary
Carroll refers to a man named Max K. Day as his business partner in several videos he has posted on social media. During a company retreat in Houston, Day was seen socializing with Wealth Assistants employees. Day asserts in one video that he has “years and years” of experience “building startups, scaling them, and then selling them.” However, Day and his family have years of experience being hauled into court.
Day and other family members, including his nephew Max O. Day, were sued in 2006 over allegations that they duped doctors into purchasing marketing software and services that didn’t deliver on promises — and, in some cases, landed the doctors in legal trouble. According to the lawsuit, Max O. Day used the name “Moe O’Neil,” and Max K. Day posed as a satisfied doctor in advertisements for their company, Today’s Destiny Inc.
According to state court and prison records shared with BI, Max O. Day was sentenced to three years in a Texas prison for burglary and escape several years before the fraud lawsuit. He was released on parole in 1998. Requests for comment made directly to Max K. Day and Max O. Day, as well as through family members, were not returned.
After submitting sworn declarations of their assets and claiming they couldn’t pay more, the Days settled the Today’s Destiny case for $50,000 in 2010.
Carroll’s storefront sales business appears to have included both Max Days. According to a screenshot shared with BI, Max O. Day was listed on the Wealth Assistants website as its chief growth officer. According to a source familiar with the situation, the Days worked as an advisor at Wealth Assistants.
However, Wealth Assistants is far from the only company that claims to have the know-how to succeed on Amazon.
“People think Amazon will make people millionaires because you’ve seen their success,” the Pennsylvania client explained. “On Amazon, anyone can become a vendor. It comes down to how much time and effort you want to put into learning how to do it. It’s an easy target for criminals.”
Wealth Assistants is not the only company that has gone down in flames. Several FTC investigations have recently focused on similar Amazon automation businesses that charge customers to run the operations of an Amazon store.
In August, the FTC temporarily shut down Automators AI, a company that promised high returns on investments for Amazon and Walmart.com stores using artificial intelligence. A court-appointed manager, known as a receiver, has said that Automators should be closed down; a settlement is pending.
The FTC sued and settled with DK Automation and its principals in November 2022, claiming they “promised consumers a ‘100% turnkey’ business selling products on Amazon and charged consumers as much as $100,000 for the program.” The company went on to say: “Their marketing and sales pitches were filled with fake consumer reviews touting huge profits.” The defendants agreed to pay $2.6 million.
According to an Amazon spokesperson, if the company discovers “abusive services” on its platform, it suspends their access and reports them to law enforcement.”Selling partners are incredibly important to Amazon and our customers and we work hard to protect and help them grow their business,” said the company. “We encourage sellers to only use responsible and vetted third-party service providers.”
‘It should be something that should be flying off the shelves, and it’s not’
Many customers are now unsure what to do next. Some sellers are unable to access their seller accounts. Others who could log in said they never intended to manage their Amazon store full-time and were stuck with unsold inventory. Because Wealth Assistants’ redesigned business model is based on FBA, clients are forced to pay Amazon fees as warehousing costs rise during the holiday season.
Even at rock-bottom prices, Wimmer struggled to sell some biodegradable trash bags. They eventually sold after he reduced the price to $5 from $11 that other sellers were charging.
“I’m actually losing money on them, but they’ve been there for so long that I just wanted to get rid of them so that I didn’t have to pay for them to be there,” he told me.
Because Wealth Assistants had ceased operations, their store had an oversupply of T-shirt dye that wasn’t selling, according to a client who spoke on the condition of anonymity to protect the privacy of their family.
“We’ve sold, out of the 120, maybe three or four, and we’ve been losing money on it pretty severely,” they went on to say. “We’re trying to figure out what we need to do, and we might have to just have it returned, in which case we have to pay Amazon all the shipping to return it.”
“Per the contract and per their research, it should be something that should be flying off the shelves, and it’s not.”
