SEC files lawsuit alleging Ponzi scheme run by Retail Ecommerce Ventures founders

The U.S. Securities and Exchange Commission filed a complaint in a Florida federal court this week accusing Tai Lopez and Alex Mehr, founders of Miami-based Retail Ecommerce Ventures, of running a Ponzi-like scheme that raised about $112 million from individual investors and used funds for personal and other improper purposes. The agency says the pair misrepresented investment returns and used investor money for personal expenses, after former REV employees alerted regulators in 2023.

REV began acquiring bankrupt retailers in 2020, transforming them into online-only brands. The portfolio grew to eight brand licenses, including Dress Barn, RadioShack and Linens ’N Things. The company bought RadioShack out of bankruptcy and acquired Pier 1 Imports and Modell’s Sporting Goods as part of a rapid expansion that left the firm heavily indebted and short on cash flow. The complaints say investors were told they could earn outsized returns while the portfolio companies posted monthly net losses ranging from $3.8 million to $12 million, illustrating a pattern of raising capital while operating cash-strapped assets.

The whistleblowers are a central element in the case. A group of former REV employees approached the SEC in 2023 with concerns about suspicious business dealings, according to multiple people with knowledge of the matter. One former employee told The Post, "We have been trying to get someone to expose Tai Lopez and his gang of fraudsters for a long time." Another former executive said he worried about illegal activity and noted the company’s pattern of promising investors 20% returns while chartering jets and traveling across the country.

Mehr, an Iranian-born entrepreneur, had previously worked in risk and safety management for NASA’s space exploration missions, according to the complaint, and partnered with Lopez as the REV empire expanded. Lopez is a prolific social media figure who frequently shares financial advice with followers. The companies in the REV portfolio were allowed to license the names of bankrupt brands, and Lopez hired his cousin Maya Rose Birkenroad as president and chief operating officer, listing her as having 10 years of experience managing multi-million dollar companies. The complaint notes Birkenroad’s professional background was described in materials as broader than her actual resume.

The SEC is not seeking jail time but asks the court to order the defendants to return ill-gotten gains and to pay a civil penalty. REV filed for Chapter 11 bankruptcy protection in 2023 and was nearly liquidated before a major investor, Raj Gupta, acquired the company and renamed it Omni Media Enterprise in May 2024. Gupta has in the past sought to reacquire Modell’s, and earlier this year he texted Modell offering to back a sale or license the Modell’s brand, the former Modell executive said; Modell’s representatives have not entered into a deal. Lopez, Mehr, Gupta and Birkenroad did not immediately respond to requests for comment.

The action by the SEC follows a pattern of regulators scrutinizing high-profile, social-media-driven investment pitches and boutique investment structures that promise outsized returns from rolled-up bankrupt brands. The agency’s civil suit seeks the return of investor funds and penalties, signaling renewed attention to investor protection in online fundraising campaigns.