Tai Lopez and Alex Mehr, the duo who scooped up nostalgic retail brands like RadioShack, Pier 1 Imports, and Modell’s Sporting Goods, are today at the center of a massive SEC lawsuit accusing them of running a $112 million Ponzi scheme.
Through their company, Retail Ecommerce Ventures (REV), the entrepreneurs promised to breathe new life into these once-popular names by turning them into e-commerce brands. But the SEC claims it was all a front.
Between 2020 and 2022, the complaint says the two “made material misrepresentations” to entice investors, saying their brands were “on fire” and that “cash flow is strong.” In reality, “none generated any profits,” according to the SEC.
“Contrary to these representations, while some of the REV Retailer Brands generated revenue, none generated any profits,” the filing reads. Instead of profit, they allegedly relied on new money from investors, loans, and internal transfers to make payments.
The SEC also alleges that at least $5.9 million paid to investors came from other investors’ funds, a classic sign of a Ponzi scheme. Meanwhile, Lopez and Mehr allegedly kept $16.1 million for themselves.
Their portfolio also included Dress Barn, Stein Mart, and Linens ‘n Things. But according to regulators, those brand acquisitions masked a failing business model built on broken promises and redirected funds.
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