RadioShack, Modell’s Sporting Goods, Pier 1 Imports, Dress Barn, Linens ‘n Things.

What connects them? These formerly popular retail brands encountered challenges and were acquired by Retail Ecommerce Ventures (REV), under the leadership of Tai Lopez and Alex Mehr.

Currently, the Securities and Exchange Commission (SEC) is charging Lopez and Mehr with orchestrating a $112 million Ponzi scheme, utilizing these brands to mislead investors.

“REV’s primary business involved identifying struggling companies with established brand recognition, securing funds from investors to buy the brand’s assets, and converting them into thriving e-commerce-only enterprises,” claims the SEC’s lawsuit. Lopez and Mehr began purchasing struggling retail brand names in 2020. From 2020 to 2022, they “made substantial misrepresentations” to gather funds from hundreds of investors.

The SEC asserts that REV promoted its strategy as “one of the finest strategies available for investment.” The company reassured investors that its collection of brands was “booming” and “strong in cash flow.” Furthermore, REV guaranteed that the funds from investors would be allocated exclusively to the designated company.

In fact, as per the SEC, although some of REV’s brands brought in revenue, none were profitable.

“To fulfill interest, dividends, and maturing note payments, Defendants employed a combination of loans from external lenders, merchant cash advances, funds from both new and existing investors, and transfers from other portfolio companies to satisfy obligations,” claims the SEC’s complaint.

“At least $5.9 million of the returns issued to investors were, in effect, Ponzi-like payments sourced from other investors,” states the SEC.

The SEC further alleges that Lopez and Mehr utilized at least $16 million of investment capital for personal expenditures.

Mashable previously covered Lopez’s acquisition of RadioShack after the firm began posting viral “edgy” tweets on the platform once known as Twitter. Under Lopez’s REV, RadioShack attempted to shift to a cryptocurrency platform in 2022 while also launching an e-commerce store using the brand’s name.

Lopez is widely recognized among YouTubers as the internet marketer who flooded the platform with video advertisements like “Here in My Garage,” showcasing Lopez with his Lamborghini to market his “get rich quick” schemes.

The SEC also includes REV’s Chief Operating Officer, Maya Burkenroad, in its lawsuit. Burkenroad was marketed to investors as an “experienced” manager who had operated multi-million dollar companies for a decade. In reality, she is Lopez’s cousin who previously served as his assistant.