EP 545 AI Side Hustles: Legal Gold Mine or Crime Scene? | Make Money Online Safely

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Are these so-called illegal AI
side hustles actually scams?

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Or are we witnessing the greatest
wealth transfer of our generation?

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Here's what, no one in the AI
space wants to admit the line

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between legitimate AI business.

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And federal crime keeps getting
thinner and thinner every single day.

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As of December, 2024, the FTCs Operation
AI Comply Initiative has launched

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coordinated enforcement actions against
AI powered fraud schemes, targeting

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exactly the kind of guaranteed income
systems being sold to desperate parents,

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to desperate entrepreneurs out there.

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Americans lost over 12.5
billion to fraud in 2024.

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Alone, that's a 25% jump from the previous
year, and for the first time ever, the

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FBI's Internet crime report included a
dedicated AI section documenting more

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than 22,000 complaints, and roughly
893 million in losses tied directly.

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To artificial intelligence under the
new FTC Consumer Reviews Rule, each fake

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AI generated review carries a penalty
of $51,744, and the FTCs chair, Linda

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Kahn has made it clear there is no AI
exception from the laws on the books.

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If you're a parent or an entrepreneur
thinking of diving into an AI

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side hustle, you need the complete
picture, not just the opportunity.

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The risk, the law, and what
happens when you cross a line

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you didn't even know existed.

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Unlike the scam courses teaching quick AI
money schemes, legitimate AI businesses

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require transparency, require compliance,
and they require an understanding of

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rapidly evolving federal regulations.

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What is up?

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What is up?

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What the hell is up my my dark
horse friends and found me.

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Welcome back to another episode of the
Dark Horse Entrepreneur AI Escape Plan.

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We break free from the grind.

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We share some AI power tips and side
hustle strategies and support my

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amazing parents out there chasing
freedom, like modern day trailblazers.

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And if you know someone who's dreaming
of ditching a grind while still making

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time for those amazing munchkins in their
life, you know, mealtimes, bedtimes,

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homework, and bedtime stories, go
ahead and forward this episode to them.

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Okay, so I, I'm taking a, a left turn.

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In this particular episode, we're gonna
talk about the AI scam epidemic and

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how to build wealth without breaking
laws you didn't even know exist.

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So I want you to come away with
three things from this episode.

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One, it's a federal crime line, how Gen AI
enabled scams exploded 456% in one year.

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Why that TikTok Promise you may
have heard of $10,000 monthly could

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actually land you in Federal court.

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Two is the FTCs new law enforcement
initiative that survived two different

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political administrations and why
they're hunting for exactly the kind of

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guaranteed income systems being sold.

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My desperate parents in states like
California and Texas and Florida.

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Those my friends, as the top
three fraud compliance states

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per the FBI's IC three data.

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And then three, the legal AI blueprint.

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Five Bulletproof principles for building
AI side hustles that actually create

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wealth while keeping you on the right
side of rapidly evolving federal law.

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We're taking a completely different
angle today, so, and here's the reason.

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Here's the truth, I think is gonna
make a few people in the AI hustle

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space very, very uncomfortable
and I'm, I'm okay with that.

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I don't mind making you uncomfortable.

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Most of the make money with AI advice
flooding social media, write this

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very minute at you're listening to
me, isn't just bad business advice.

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It's in many cases a roadmap straight.

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Two federal prosecution, and
I'm not talking about some

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distant theoretical risk here.

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I'm talking about parents who sought,
they were building legitimate AI

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side hustles and end up facing
FTC investigations, copyright

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lawsuits, and criminal fraud charges.

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Yeah, no joke.

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Let's go ahead here.

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Let's picture yourself right now.

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It's Tuesday night.

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Your kids are finally
asleep, the dishes are done.

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You're scrolling through TikTok.

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Kitchen table with a cup of coffee.

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It's, who cares about the cup of coffee?

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It's already gone cold.

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You're tired and you can't sleep
yet because this is the only quiet

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time you have to think about money.

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You see a video that stops your scroll.

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It stops your thumb in
the, oh wait, what's this?

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Someone's showing screenshots of
PayPal deposits, 5,000, 3,008,000.

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They're talking about writing AI generated
Amazon reviews and how you can scale

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the system in just 30 minutes a day.

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You think, wow, this could be perfect.

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You need a little extra income, right?

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Of course you do.

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You're good with technology.

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You are okay with it.

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You have 30 minutes a day.

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This fits right into your family schedule.

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You could do this after bedtime stories
and before the morning chaos ever begins.

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You sign up for the course, that's
a $2,000 hit to your credit card.

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Money you don't really have, but money
you're convinced that you'll make back.

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In the first months, you tell
yourself this is an investment

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in your family's future.

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Within three months,
you're making it work.

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You're sitting at the same kitchen
table using chat GBT to generate

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hundreds of unique convincing
reviews from Amazon sellers.

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You've gotten good at this, actually.

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You're writing in different styles.

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You're sending different,
adding different details.

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You are using different tones,
and you're charging $5 per review,

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pulling in about three KA month.

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Not the 5K promise, but it's enough
to help with the groceries and

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all the kids extra activities.

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You feel proud.

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You've figured it out.

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You are making money from home
on your schedule using technology

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you are providing for your family
in a way that actually works.

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Then October 21st, 2024 arrives.

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You didn't know it, but the FTCs
new rule, prohibiting fake, and AI

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generated consumer reviews takes effect.

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No one in your AI review Empire
course mentioned this rule.

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You keep running your business
because, I mean, why wouldn't you?

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It's working.

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Fast forward to July, 2025.

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You're checking the mail
after the school pickup kids.

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You're arguing in the backseat
when you see the official envelope

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with a government return address.

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Your stomach drops
before you even open it.

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It's from the FTC.

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They're investigating the review
network that you are a part of.

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They have records of every fake
review you've ever written.

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Oh, and by the way, under the new
rule, each review represents a

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civil penalty of up to $51,744.

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Per review, you sit in your driveway.

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Kids are still in the backseat arguing,
but in your head, you're doing math.

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You never wanted to do 400
reviews over eight months.

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It's 400 violations times that 51,744.

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That equals a potential liability
of wait for it over $20 million for

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a side hustle that was supposed to.

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Just help you pay for the groceries.

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You're not a criminal.

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You didn't try to hurt anyone.

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You were a parent who got caught
in a system designed to exploit

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your desperation for extra income.

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You followed the course
exactly as it was taught.

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You did everything they say
would make you money, and now

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you're facing the possibility.

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Of losing everything.

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Your house, your kids' college fund,
your entire financial future because

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you trusted someone who promised
you could make easy money with ai.

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This my friend, is your wake up call.

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This is the moment you realize that the
line between legitimate AI businesses

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and federal crime, it's not thin.

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It's invisible to most
people selling these systems.

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Or buying them, and they're counting
on you not knowing where that line

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even is until it's way too late.

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That's why I'm doing this
episode for you today.

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Let me break down exactly what's
happening in the AI side hustle

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space and how to protect yourself
against becoming that scenario.

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We just walked through
right there and we broke.

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I broke these down into a few categories.

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First is the example I gave category
one is the AI generated fake.

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Reviews.

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This represents probably the most
common side hustle people stumble

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all into without realizing they're
committing a federal violation.

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And here's how it works.

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Someone sets up a service selling five
star reviews to Amazon sellers, to

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Google business listings or Yelp pages.

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They use AI to generate hundreds of unique
convincing reviews that each sound like

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a real person would've written them.

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The legal reality is that on August
14th, 2024, the FTC announced a final

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rule under section five of the FTC Act.

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In prohibiting fake, and AI generated
consumer reviews in testimonials

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and even celebrity endorsements.

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This rule took effect October
21st, 2024, a year and a half ago.

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The penalties, as I mentioned, are
brutal 51,000 and chained per violation,

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and, and they're not just targeting the
people that are posting the reviews.

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And in September, 2024, the FTC went right
after writer, RYTR, an AI writing tool

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because it's review generation feature
produced a detailed, specifically claims,

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uh, completely unrelated to reality.

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Right.

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It was, it was complete.

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It was, it was crazy.

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FTC Chair Linda Kahn put it plainly.

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There is no AI exception
from the laws on the books.

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Right.

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So here's a red flag warning for you.

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If someone's teaching you to use
AI to generate reviews using AI

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to generate testimonials or using
AI to generate endorsements for

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businesses that you've never used, run.

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I want you to stand up and force
Gump yourself in another direction.

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This is federal fraud, period.

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In the story.

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If you suspect fraud, go ahead and
report it immediately to report

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fraud.ftc.gov or ic three.gov.

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Seriously, if you have one of
those, go ahead and report it.

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Category number two is to
build your AI empire scam.

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This hit close to home because they
significantly target parents excited to

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buy AI who want to build something real.

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Use the pattern.

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A company promises that you can
build an AI powered e-commerce empire

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through their training program.

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They charge anywhere from 2000 to 35,000
for the Done For You storefront version.

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They show testimonies from people
making six and seven figures.

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Here's the legal reality.

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The FTC has cracked down hard
in several of these operations.

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E-Commerce Empire
Builders by Peter Kowski.

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They charged customers up to
$35,000 for AI powered storefronts.

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The FTC alleges those profits.

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Never materialized.

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FBA machine allegedly guaranteed consumers
could make money operating online

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storefronts using AI powered software.

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They defrauded co consumers
out of over $15 million.

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Now this this reflects
operation AI comply in action.

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The FTC launched this initiative, which
is Operation AI Comply back in September

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25th, 2024, and it specifically is
designed to tackle unfair and deceptive

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business practices that center around ai.

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What's remarkable is it.

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Is that this operation continued under
the new administration, which tells

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you about how seriously the government
is, is taking this initiative.

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Let me give you a red flag warning here.

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If someone is selling you a
guaranteed income system, once

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again, force Gump and run.

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Just go the other direction if the
income claims are too good to be true.

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Probably means they are.

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So category number three
is deep fake fraud, right?

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It's fun to look like someone
else on the screen, but let's talk

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about this 'cause this is where
things I think get genuinely scary.

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In February, 2024, a finance
worker at Rup, A RUP, a global

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engineering firm got tricked into
wiring $25 million to fraudsters.

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Yeah, deep fake.

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Hello, the scam involved a sophisticated
video conference featuring deep fake

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versions of the company's CFO and
other executives, a form of, uh,

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business email compromise fraud.

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The FBI reports.

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It's probably one of the most costliest
cyber crimes out there right now,

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coming in at, uh, what, 2.77 billion
in losses, uh, back in 2024 alone.

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So it, it could have gone up on this, a
French woman who lost nearly a million

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dollars to someone impersonating Brad Pitt
using AI generated images and a deep fake.

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Video.

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I know some of you are going, how could
they think Brad Pitt would do that?

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Trust me, some people are very convincing.

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In 2024, McAfee Study found that one
in four adults have experienced an

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AI voice scam with scammers needing
just about three seconds of video

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to create an 85% MA voice match
using advanced voice cloning kick.

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Chronology.

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I've heard of some of these where
someone, you know, voice clones

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you or someone you love, and I'm
stranded out here in the desert of

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Arizona, can you wire me some money?

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And they sound like your
son or your daughter.

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Yeah.

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Here's the legal reality.

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President Trump signed the Take
It Down Act in May of 2025.

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Prohibiting non-consensual publication
of intimate visual depictions,

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00:12:24,386 --> 00:12:27,931
including deep fakes, multiple states,
including California and New York

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00:12:27,931 --> 00:12:31,668
and Texas have criminalized deep
fake creation with fraudulent intent.

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And these, and their penalties
are up to a million dollars in

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00:12:35,395 --> 00:12:37,277
fines in like 20 years in prison.

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So don't horse around with that one.

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00:12:39,050 --> 00:12:40,604
Here's a red flag warning
for you on this one.

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00:12:40,768 --> 00:12:44,586
Some people in the AI space will tell
you that there's money in creating

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deep fake content as a service.

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00:12:46,822 --> 00:12:51,513
This is a minefield and it's got
multiple laws and escalating penalties,

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00:12:51,513 --> 00:12:54,104
so just avoid this one like the plague.

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Okay.

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This moves us to category
number four, which is the AI

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professional services fraud.

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Remember, do not pay.

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00:13:00,672 --> 00:13:05,363
They marketed themselves as the world's
first AI lawyer that could generate

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perfectly valid legal documents and
file lawsuits on behalf of people.

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One problem do not pay.

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Didn't employ a. Any actual
attorneys, none whatsoever.

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00:13:15,599 --> 00:13:20,781
Their AI chat bot outputs were never
tested against the work of a human lawyer.

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The FTC found that their
representations were misleading.

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00:13:23,918 --> 00:13:25,881
An unsubstantiated do not pay.

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Settled for a mere $193,000 red
flag warning, if you are selling

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00:13:31,118 --> 00:13:34,772
an AI tool that claims to provide
legal service, medical guidance,

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00:13:34,963 --> 00:13:38,972
financial planning, or any regulated
professional service you need.

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To use extreme clear about your claims.

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If your AI is hallucinating fake
information, which all AI systems

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seem to do to some degree, you could
be liable for all the consequences,

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just putting it out there for you.

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And then category number
five, copyright infringement.

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This one represents probably
the most nuanced category.

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There have been, I don't know,
well over 30 copyright infringement

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lawsuits, uh, filed against,
uh, generative AI developers.

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Philanthropic recently settled one of
the largest for 1.5 billion, where a

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compensated author is approximately
$3,000 each for an estimated

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500,000 books used in training data.

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Here's the fact that matters most
for the AI site hustlers out there.

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The US Copyright Office has consistently
ruled that works created solely by ai lack

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human authorship, and therefore are not
eligible for copyright and protection.

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If you generate an image, if you generate
a piece of music, or you generate a

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written work entirely with AI and then
sell it, you have no legal ownership.

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Over your own product.

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So, and you hear me say, use ai.

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00:14:43,427 --> 00:14:46,836
Use ai, but you also hear
me say, work with ai.

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Don't replace your own thinking.

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Okay, so here's the red flag warning here.

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If your entire business model is generate
stuff with AI and sell it cheap, well

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you're competing for a race to the bottom
that has no legal protections in it.

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00:15:00,418 --> 00:15:00,663
Okay?

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00:15:00,881 --> 00:15:04,127
So if you're ready to build an
AI side, hustle the right way.

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Legally, ethically and sustainably, I
wanna help you navigate this complex

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00:15:08,809 --> 00:15:10,363
landscape as much as possible.

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00:15:10,363 --> 00:15:14,209
The AI Escape Plan Newsletter is
specifically designed for my parents,

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00:15:14,209 --> 00:15:16,690
my entrepreneurs out there who wanna
break free from the nine to five,

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00:15:16,690 --> 00:15:20,809
using AI powered strategies that
won't land you in federal court.

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00:15:20,890 --> 00:15:25,690
Each issued delivers practical tested
strategies to start, grow, and streamline

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00:15:25,963 --> 00:15:30,136
your side hustles all designed to
protect your family time, your busy life.

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00:15:30,368 --> 00:15:34,595
While boosting your income legally
and ethically, it's your roadmap

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00:15:34,595 --> 00:15:37,786
to more money, more freedom, and
more of it truly matters without

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00:15:37,786 --> 00:15:39,695
all the legal nightmares out there.

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The entrepreneurs who build AI
businesses the right way aren't

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going to just avoid legal trouble.

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00:15:45,668 --> 00:15:49,131
They're going to own the future
while everyone else scrambles to

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00:15:49,131 --> 00:15:53,359
rebrand after this FTC crackdown
if they learn about it, and they'll

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00:15:53,359 --> 00:15:54,640
probably learn about it the hard way.

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00:15:54,695 --> 00:15:57,095
Here's what's really
happening at a macro level.

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We're witnessing the collision of the
most powerful wealth creation technology

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00:16:01,659 --> 00:16:06,049
in human history, and the legal system
that's scrambling to catch up with it.

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00:16:06,459 --> 00:16:10,495
According to Deloitte, generative
of AI fraud in the US is expected

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to hit $40 billion by 2027.

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00:16:13,822 --> 00:16:19,904
Microsoft analyzed over 531,000 fraud
reports and found that scams victims

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00:16:19,904 --> 00:16:21,404
identified as AI enabled increased.

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00:16:21,731 --> 00:16:27,159
20 fold from 2023 to 2025, and
we're only halfway into 2026 here.

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00:16:27,268 --> 00:16:29,968
Meanwhile, the illegal
infrastructure for AI enforcement

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is being built in real time.

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00:16:32,150 --> 00:16:34,577
So the scammers are out ahead right now.

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00:16:34,631 --> 00:16:36,868
Uh, but trust me, the legal
infrastructure's catching up.

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The FTC is not going away.

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Ladies, gentlemen, operation AI comply.

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00:16:41,527 --> 00:16:45,672
Is expanding over 60 countries
are developing AI regulations.

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00:16:45,890 --> 00:16:51,209
The eus AI Act can impose fines
of up to 6% of global turnover.

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00:16:51,509 --> 00:16:55,109
Now working alongside with
existing frameworks like GDPR

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00:16:55,381 --> 00:16:57,672
to create comprehensive digital.

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Accountability.

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00:16:58,940 --> 00:17:02,622
This creates a massive opportunity
for my ethical entrepreneurs

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00:17:02,622 --> 00:17:06,440
out there who understand how to
build AI businesses correctly.

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00:17:06,550 --> 00:17:09,413
While the market gets flooded
with scammers and get rich quick

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00:17:09,413 --> 00:17:14,268
schemes, there's a growing demand
for trustworthy, ethical AI services

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00:17:14,322 --> 00:17:16,422
and ethical AI entrepreneurs.

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You and me.

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Okay.

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00:17:18,159 --> 00:17:23,013
We, the entrepreneurs who position
ourselves as reliable legal alternatives

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00:17:23,177 --> 00:17:24,977
aren't just building businesses.

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00:17:25,168 --> 00:17:30,159
We're building monopolies in markets,
desperate for honest operators.

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00:17:30,159 --> 00:17:32,940
So all that said, here's your
whisker wisdom for this week.

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00:17:33,131 --> 00:17:37,931
AI is the most powerful tool for
building wealth that most of us will

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00:17:37,931 --> 00:17:39,540
encounter in our entire lifetime.

337
00:17:39,722 --> 00:17:43,322
But powerful tools require
powerful responsibility.

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00:17:43,404 --> 00:17:47,413
The difference between an AI entrepreneur
and an AI criminal often comes down

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00:17:47,413 --> 00:17:50,359
to disclosure, accuracy, and honesty.

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00:17:50,604 --> 00:17:55,813
So your specific action for this week
before you start any AI side hustle,

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00:17:55,922 --> 00:17:57,149
or if you've already started one.

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00:17:57,436 --> 00:18:00,463
Alright, ask yourself
these five questions.

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00:18:00,600 --> 00:18:02,972
Am I transparent about using ai?

344
00:18:03,272 --> 00:18:06,763
Am I fact checking
everything my AI produces?

345
00:18:06,927 --> 00:18:10,663
Am I creating genuine value
or just arbitrage technology?

346
00:18:10,881 --> 00:18:12,981
Am I respecting intellectual property?

347
00:18:13,899 --> 00:18:18,590
And would I be comfortable explaining this
business model to an FTC investigator?

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00:18:18,645 --> 00:18:21,727
If you can't answer yes to
all five of those questions,

349
00:18:21,945 --> 00:18:23,527
do not start that business.

350
00:18:23,609 --> 00:18:26,254
Or if you've already started
it, stop and find one.

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00:18:26,254 --> 00:18:30,481
You can answer yes to all five too,
because those are the businesses

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00:18:30,590 --> 00:18:33,999
that will be standing when the
regulatory dust comes to settle.

353
00:18:34,218 --> 00:18:38,690
The legal landscape is changing fast,
but the principles of honest business.

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00:18:38,895 --> 00:18:42,740
Remain constant, build something
real, serve people genuinely, and

355
00:18:42,740 --> 00:18:48,031
use AI to amplify human expertise
rather than replace human honesty.

356
00:18:48,277 --> 00:18:51,168
The AI revolution is creating
unprecedented opportunities.

357
00:18:51,222 --> 00:18:55,259
That's a fact for all the entrepreneurs
out there who build something meaningful.

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00:18:55,759 --> 00:19:00,750
But it's also creating unprecedented
risks for those who chase shortcuts and

359
00:19:00,750 --> 00:19:02,359
those who completely ignore the rules.

360
00:19:02,468 --> 00:19:03,313
The choice is yours.

361
00:19:03,395 --> 00:19:04,922
The choice is always yours.

362
00:19:05,113 --> 00:19:08,359
Build an AI business that can
withstand scrutiny and create long

363
00:19:08,359 --> 00:19:12,036
lasting wealth, or chase the quick
money and risk losing everything.

364
00:19:12,554 --> 00:19:15,581
The entrepreneurs who choose the
ethical path aren't just protecting

365
00:19:15,581 --> 00:19:16,836
themselves from legal trouble.

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00:19:17,109 --> 00:19:21,745
They're positioning themselves to
dominate markets where trust becomes

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00:19:21,745 --> 00:19:23,572
the ultimate competitive advantage.

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00:19:23,736 --> 00:19:27,063
It's not just the right thing to
do, it's the smart thing to do.

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00:19:27,363 --> 00:19:28,999
Think successfully, take action.