Radio Shack and Pier 1 Owners Face SEC Charges Over $112M Ponzi Scheme
Prominent Entrepreneurs Face $112 Million Ponzi Scheme Allegations
Two well-known e-commerce figures, Alex Mehr and Tai Lopez, are under investigation for allegedly orchestrating a $112 million Ponzi scheme. They are accused of misleading investors while acquiring struggling retail brands such as Pier 1 Imports, RadioShack, Modell’s Sporting Goods, Dress Barn, and Stein Mart, and falsely claiming these companies were thriving.
The Securities and Exchange Commission (SEC) alleges that Mehr and Lopez, founders of Miami-based Retail Ecommerce Ventures (REV), made false representations about the financial success of these brands between 2020 and 2022. They touted these acquisitions as profitable ventures when, in reality, none of the companies turned a profit.
The duo allegedly used a mix of outside loans, merchant cash advances, new investor funds, and transfers from other portfolio companies to meet financial obligations, including interest payments, dividends, and maturing debt. At least $5.9 million paid to investors was reportedly sourced from other investors in a manner characteristic of Ponzi schemes.
Furthermore, the lawsuit accuses them of misrepresenting that funds raised would be allocated exclusively to the respective companies, which was not the case. Instead, they allegedly diverted $16.1 million for personal use.
Photo evidence shows Lopez and Mehr frequently appeared in lavish settings, including fronting private jets, and Lopez has built a reputation as a social media influencer and self-help author, known for his “67 Steps” program aimed at wealth-building through teachings of notable figures like Bill Gates and Gandhi.
Key Details
- REV acquired RadioShack in 2020 after its second bankruptcy.
- The same year, they bought assets from Modell’s and Pier 1 Imports.
- They are accused of making material misrepresentations to investors regarding company performance.
- At least $16.1 million was allegedly misappropriated for personal use.
The case remains open, and neither Lopez nor Mehr has issued a public response to the allegations.