A duo of dynamic online entrepreneurs who acquired failing retail brands — such as Pier 1 Imports, RadioShack, and Modell’s Sporting Goods — now face accusations of orchestrating a $112 million Ponzi scheme, as detailed in a recent lawsuit.
The U.S. Securities and Exchange Commission has charged Alex Mehr and Tai Lopez, the founders of Miami’s Retail Ecommerce Ventures (REV), with defrauding investors out of approximately $112 million, according to legal documents filed in the federal Southern District of Florida that were obtained by The Post.
Mehr and Lopez gained notoriety for purchasing struggling brick-and-mortar businesses and transforming them into online-only retailers.
The lawsuit notes that their business portfolio also features brands like Dress Barn and Stein Mart.
Mehr, an immigrant from Iran who previously worked in “risk and safety management for NASA’s space exploration missions,” partnered with Lopez amidst the retail crisis in 2019 when around 10,000 stores closed down, as reported by The Post earlier this year.
Lopez is not just a businessman; he is also a social media figure who has authored multiple self-improvement books, including his “67 Steps” guide to achieving “wealth,” which draws from “insights of influential leaders like Bill Gates, Charlie Munger, Peter Drucker, Gandhi, and my personal mentors.”
One of their notable transactions involved the acquisition of RadioShack in 2020, following the chain’s second bankruptcy a few years earlier.
They also acquired the assets of Modell’s and Pier 1 Imports as part of their 2020 bankrupt company acquisitions.
The enterprising duo reportedly made “material misrepresentations” to numerous investors about the brands’ performance between 2020 and 2022, claiming that the companies were “thriving,” as the SEC has claimed.
Furthermore, they allegedly misled potential investors by claiming that funds raised for their companies would solely support that specific business, according to the legal filing.
“In reality, while some of the REV Retailer Brands did bring in revenue, none were profitable,” the lawsuit alleged.
“As a result, to meet interest, dividends, and maturing note payments, the Defendants had to rely on a mix of loans from external lenders, merchant cash advances, funds from new and existing investors, and transfers from other portfolio companies to fulfill their obligations,” the document stated.
According to the SEC, at least $5.9 million in payments to investors were essentially Ponzi-like disbursements financed by contributions from other investors, rather than from the companies themselves.
The regulatory body also accused Mehr and Lopez of diverting $16.1 million for personal expenditures.
Neither Lopez nor Mehr immediately provided a comment when approached by The Post.
