Buyers of Radio Shack, Pier 1 brands accused of running $112M Ponzi scheme
7 hours ago
- #Ponzi Scheme
- #SEC Fraud
- #Retail Ecommerce
- Alex Mehr and Tai Lopez, founders of Retail Ecommerce Ventures (REV), accused of running a $112 million Ponzi scheme.
- REV acquired distressed retail brands like RadioShack, Modell's Sporting Goods, and Pier 1 Imports to convert them into online-only stores.
- SEC alleges Mehr and Lopez misled investors about the financial health of their acquisitions, claiming strong cash flow and profitability when none existed.
- Funds from new investors were used to pay returns to earlier investors, a hallmark of a Ponzi scheme.
- $16 million of investor funds were allegedly diverted for personal use by Mehr and Lopez.
- Maya Burkenroad, REV's COO and Lopez's cousin, accused of aiding the scheme; her professional background allegedly misrepresented.
- None of the acquired brands under REV generated profits, contrary to representations made to investors.