A pair of entrepreneurs who bought well-known retailers including RadioShack, Modell’s Sporting Goods and Pier 1 Imports are facing accusations of running a Ponzi scheme.
The Securities and Exchange Commission filed a lawsuit on Monday against Alex Mehr and Tai Lopez, founders of Miami-based Retail Ecommerce Ventures (REV). The SEC alleges that they defrauded investors out of approximately $112 million between 2020 and 2022.
REV acquired several bankrupt retailers with the goal of relaunching them online. Its purchases included Dress Barn, Linens ’n Things, Modell’s, Pier 1 Imports, and RadioShack. While some of these brands generated revenue, the SEC claims none were profitable.
Radioshack went viral back in 2022 after Lopez and his associates purchased the electronics brand and began posting a series of questionable tweets on Twitter.
SEC allegations
According to the lawsuit, Mehr and Lopez told investors their companies were “on fire” and that “cash flow is strong.” They also said money raised for specific companies would only be used for those businesses. The SEC alleges the pair instead used funds across different ventures, while also relying on outside loans, new investors, and other transfers to cover obligations.
At least $5.9 million in returns were Ponzi-like payments made using other investors’ money rather than profits, the complaint states. The SEC also alleges that $16 million was used by Mehr and Lopez for personal purposes.
REV Chief Operating Officer Maya Burkenroad, Lopez’s cousin, is also accused of aiding in the scheme. The SEC alleges that her professional experience was misrepresented on the company’s website, claiming she had managed multi-million-dollar companies. Before joining REV, she had worked as a substitute preschool teacher, a radio promoter, and as Lopez’s assistant in a previous venture.
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