- The SEC has filed a lawsuit against Retail Ecommerce Ventures (REV) co-founders Alex Mehr and Tai Lopez, along with COO Maya Burkenroad, accusing them of defrauding investors out of $112M.
- The trio allegedly sold high-yield, unsecured notes and equity shares while misrepresenting the financial health of REV’s portfolio, which included RadioShack, Pier 1 Imports, and Modell’s.
- According to the SEC, around $6M in investor payouts were “Ponzi-like,” funded by new investors rather than business revenue. Another $16M was allegedly used for personal expenses.
- REV’s retail portfolio was never profitable, and the company dissolved in 2023 after creditors foreclosed on its assets.
Retail Revival Gone Wrong
Retail Ecommerce Ventures, a Florida-based firm founded by entrepreneur Alex Mehr and influencer Tai Lopez, gained attention for acquiring legacy retailers out of bankruptcy. Its portfolio includes well-known brands like RadioShack, Pier 1 Imports, and Modell’s. But federal regulators now say the operation behind those revivals was anything but sound, reports Bisnow.
On Tuesday, the SEC filed a civil lawsuit in the Southern District of Florida against Alex Mehr, Tai Lopez, and REV COO Maya Burkenroad. The agency accuses them of orchestrating a scheme that misled hundreds of investors between 2020 and 2022.
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What The SEC Alleges
According to the complaint, the REV executives raised millions by selling unsecured notes that offered annual returns of up to 25%. They also sold equity stakes that promised monthly payouts to investors. They marketed these investments as safe and backed by strong cash flow, despite the brands consistently operating at a loss.
The SEC claims that:
- Roughly $6M paid to early investors came from funds raised from later investors—a hallmark of a Ponzi scheme.
- About $16M in investor capital was misappropriated for personal use.
- The executives continued raising funds even as the business faltered, eventually relying on loans and cash advances to stay afloat.
REV’s Collapse
Despite the promises of a retail renaissance, the brands under REV’s umbrella—including Dressbarn, Stein Mart, and Linens ’N Things—failed to turn a profit. By 2023, the company’s secured creditors foreclosed on its assets. REV dissolved, and those assets were transferred to a new entity, Omni Retail Enterprises.
What’s Next
The SEC is seeking civil penalties, a ban preventing the defendants from serving as officers of public companies, and repayment of allegedly ill-gotten gains. The case underscores the risks of private investment in distressed retail brands, especially when wrapped in high-yield promises.
Why It Matters
This case highlights growing regulatory scrutiny of startup-style turnarounds in the retail sector. As traditional brands look for second lives online, the lines between innovation and investor deception may be blurrier than they appear.
