i think some of you guys are missing the point. If this is a scam, then it's scam and it's not worth talking about. all points are irrelevent.
If this is a legit offer, then it's a ridiculously good deal. A few of you said you can do all this on your own but I haven't seen anyone put 10,000 CDs in stores without a distributor. You cannot get in Best Buy, FYE, and Walmart without distribution.
Also, unless you're a name artist with a history of solid sales or a huge buzz, no distributor is gonna pay you shit up front. If anything, they'd cover some expenses like studio, promo, manufacturing, etc. and they'd charge it back as a recoupable expense.