WiFi Money sued by Nebraska Attorney General over allegations of 'deceptive' passive income promises
- Social-media collective WiFi Money was sued by the Nebraska Attorney General's office.
- WiFi Money has made tens of millions of dollars pitching controversial "passive income" investments.
WiFi Money was sued by Nebraska's Attorney General who alleged the social-media collective offered "deceptive" get-rich-quick schemes that lost residents of the state more than $3 million.
On Tuesday, the state filed a lawsuit focused on investment opportunities that WiFi Money marketed during the COVID-19 pandemic that promised to make investors a profit by dropshipping on Amazon and Walmart's online marketplaces.
A Business Insider investigation published in May 2024 found that WiFi Money has made tens of millions of dollars pitching entrepreneurial philosophy and online "passive income" opportunities on Instagram. The influencers behind it have built a brand off of their flashy lifestyles — private jets, supercars, luxury watches, and endless vacations — and the alluring idea that anyone can "make money anywhere in the world, by doing one simple action... connecting to WiFi."
Beyond dropshipping, it pitched cryptocurrency, real estate, business bootcamps, and investments related to the Employee Retention Credit, a pandemic-era tax credit that has been susceptible to alleged scams, according to the IRS.
Along the way, the group has been accused of fraud numerous times, including in an ongoing lawsuit in Florida involving more than 30 disgruntled former investors. Nearly 100 complaints have been lodged with the FTC about WiFi Money and two of its partner companies, BI previously reported.
"WiFi Money has made a multitude of its customers prosperous, particularly during the pandemic, as well as afterwards, despite ever-shifting economic winds," the company's attorney, James Ragano, said in a statement in May. He declined to comment on specific lawsuits at that time, and he didn't respond to another request for comment on Monday.
Nebraska's case focuses on losses incurred by at least 60 Nebraskans who paid tens of thousands of dollars each to buy e-commerce "stores," but never saw any return on their investment, according to the state AG's complaint.
The suit accused WiFi Money members and several partner companies of violations of the Consumer Protections Act and Nebraska's Uniform Deceptive Trade Practices.
The AG also accused one specific member of the group of making "misleading and deceptive claims regarding the breadth and success of Defendants' 'e-commerce automation' schemes." This person "misrepresented her own success and finances, flaunting a high-end and wealthy persona online to mislead consumers," the office of Michael Hilgers, Nebraska's AG, wrote in the complaint.
"After taking money from Nebraska consumers, Defendants spent the funds on luxury vacations in exotic locales, Lamborghinis, Cadillac Escalades, and other high-end vehicles, multi- million-dollar mansions, jewelry, designer clothing, private airplanes, a lakehouse, and countless other extravagances. Defendants then used their lavish lifestyles to lure more consumers into the scheme," according to the Nebraska AG suit.
WiFi Money has also grappled with another legal matter this year: Its private jet. In May, the organization had an almost $1 million lien against its jet over unpaid mechanic and storage fees for the aircraft, according to another lawsuit filed against the group earlier this year.
The company claimed the charges were "grossly inflated," and in September it reached a settlement with the aircraft maintenance firm, court records from Alachua County, Florida, show, the details of which were not disclosed.
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