Buyers of Radio Shack, Pier 1 Imports and other brands accused of running $112 million Ponzi scheme
A scandal has rocked the e-commerce world as a pair of entrepreneurs, Alex Mehr and Tai Lopez, founders of Retail Ecommerce Ventures (REV), have been accused of running a Ponzi scheme by the Securities and Exchange Commission (SEC). The SEC alleges that Mehr and Lopez defrauded investors out of approximately $112 million by making false representations about the distressed retail brands they acquired.
Under the umbrella of REV, Mehr and Lopez purchased well-known retail brands like RadioShack, Modell’s Sporting Goods, and Pier 1 Imports out of bankruptcy. Their strategy was to transform these brick-and-mortar companies into successful online-only brands. Other acquisitions by REV included Dress Barn and Linens ‘n Things.
RadioShack, a nearly century-old electronics chain, first filed for bankruptcy in 2015. REV acquired RadioShack in 2020 and later sold it to Unicomer Group in 2023. Modell’s Sporting Goods filed for bankruptcy in March 2020 and REV acquired the brand name and assets in August of the same year. Pier 1 Imports, which still operates as an online store, declared bankruptcy in early 2020, with REV acquiring its trademark name and assets later that year.
The SEC’s lawsuit alleges that between 2020 and 2022, Mehr and Lopez misled investors by claiming that the companies they acquired were thriving and generating strong cash flow. They also falsely stated that investor funds would only be used for the specific company they were investing in. However, the SEC found that none of the REV Retailer Brands were profitable, and the defendants resorted to using various methods to cover financial obligations, including using funds from new investors to pay returns to existing investors.
Furthermore, the SEC claims that at least $5.9 million of returns paid to investors were actually Ponzi-like payments funded by other investors, rather than profits from the companies. Additionally, Mehr and Lopez allegedly allocated $16 million of investments for their personal use.
Maya Burkenroad, REV’s Chief Operating Officer and Lopez’s cousin, is also implicated in the scheme. The SEC alleges that Burkenroad aided Mehr and Lopez in their fraudulent activities. Despite being portrayed on REV’s website as having extensive experience managing multi-million-dollar companies, the SEC asserts that Burkenroad’s prior work experience was vastly different, including roles as a preschool teacher, radio station promoter, and assistant to Lopez at a previous venture.
Mehr, Lopez, and Burkenroad have not yet responded to the allegations. The SEC’s lawsuit was filed in the U.S. District Court for the Southern District of Florida, and the investigation into REV’s operations is ongoing. This scandal serves as a cautionary tale for investors and underscores the importance of due diligence when considering investment opportunities.
