Promo products industry entrepreneur AK Kurji has reached a settlement with the Federal Trade Commission over allegations his company Gennex Media LLC made false, misleading or unsupported advertising claims that products it was selling through its BrandNex (asi/145204) brand were all or virtually all made in the United States.

Ak Kurji

As part of the settlement, Gennex/Kurji will pay $146,249. The settlement notes that Kurji and Gennex are prohibited from making unqualified U.S.-origin claims for any product, unless they can show that the product’s final assembly or processing – and all significant processing – takes place in the United States.

Kurji told ASI Media that the case against him was a result of missteps he made when he was younger and didn’t know better.

The FTC’s civil complaint, Kurji said, was based on a few instances of Made-in-the-USA assertions that first appeared years ago on a now shuttered BrandNex website, on a Facebook header and in a YouTube video he said garnered minimal views. FTC officials said such claims appeared on price lists, too.

Kurji said he was still in his 20s and trying to build his business when the claims were made. The Texas-based entrepreneur said that he believed he was legally able to present the products as American-made. There were a variety of reasons for that. One partial reason is that he was sourcing some products from U.S.-based companies. Another was that his input expenses to produce a product – like labor, screen printing, etc – on items like wristbands comprised the vast majority of the items’ cost, he explained.

“I was young. I didn’t know better. I was maybe moving too fast and didn’t have the right advice, and in my head, I thought what we were doing was fine,” Kurji says. “I wasn’t trying to deceive anyone. I didn’t think we were doing anything wrong.”

Still, the FTC thought otherwise and ultimately brought the case. “You can’t say your products are made in the USA when most of them are made elsewhere,” said Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection.

Kurji said that initially authorities were looking at a penalty of $2 million against him. He ultimately decided to settle the case when the levy was reduced to $146,249.

“I’ve already spent $400,000 on legal fees,” Kurji said. “It was time to move on and focus on building my business.”

That new venture is Swagify.com, a white-label on-demand order fulfillment and warehousing service that decorates and ships products, including apparel, accessories and home and living items, for online businesses and distributors. The difference between Swagify and some of the other on-demand platforms out there, Kurji said, is that his allows promo distributors to choose their preferred vendors and control their supply chain.

Kurji also remains a partner in fast-growing Texas-based promo supplier PMGOA (asi/79982). The firm, which he founded, was formerly a DBA of Kurji’s Gennex Media but recently sold, he said. Kurji’s no longer involved in the day-to-day running of PMGOA.

Kurji has openly shared with ASI Media and other media outlets about his past legal troubles. As with the Made-in-the-USA case, he said that his being a young and naïve entrepreneur who didn’t fully understand the business world led to issues related to legal compliance and more. That caused trouble. He ended up running afoul of the federal government and pleading guilty to charges of conspiring to fix prices on promotional products.

After serving eight months on charges tied to that case, he was released in April 2020 and hit the ground running, playing a vital role in pivoting PMGOA, which he was then actively involved in, to sales of personal protective equipment (PPE) amid the COVID-19 pandemic. Growth was meteoric, and PMGOA added 150 jobs in just three months last year. The number would increase. “Depending on the season, we created as much as 180 jobs and helped meet the major demand for PPE,” Kurji said.

While he’s not proud of his past, Kurji, who has also emerged with a clean bill of health following a scare from a benign brain tumor, said that he’s open about it. He believes he has valuable lessons to share that can help other young entrepreneurs avoid the pitfalls that snared him.

“I know I made mistakes, but I’m not a scammer,” he said. “I also don’t hide from what’s happened. It’s there. It’s reality. But now I’m focused on building a great business and doing as much good as I can along the way.”