A duo known for their eye-catching e-commerce ventures and their purchase of struggling retailers, including Pier 1 Imports and RadioShack, has faced criticism from the Federal Reserve this week over allegations of running a Ponzi scheme.
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit on Tuesday in a Florida federal court, accusing the pair of misappropriating around $112 million through their Miami-based retail online business, Rev.
Interestingly, the lawsuit did not mention that earlier this year, some former employees had reached out to the SEC, expressing concerns about questionable business practices.
One ex-employee shared with the Post, “We’ve been trying to bring to light what Ty Lopez and his crew are up to for quite a while.” Another former executive, who left Rev after only a short time, noted that they felt uneasy about their role there, saying, “It felt like I was compromising my integrity. I could have seen something illegal happen. I’ve never been part of a company that gives 20% returns to investors and offers flights around the country.”
During their prime, Lopez and Mail flaunted their wealth, fully aware of their financial situation—until their retail ambitions began to fall apart in 2023.
Mehr, who previously worked in risk management for NASA’s space projects, collaborated with Lopez in 2019 as their retail endeavors soared.
Lopez has a large following on social media and often shares advice on finance and personal development with his audience.
According to the lawsuit, the pair allegedly misused $16 million from investors for personal expenses.
Rev began acquiring bankrupt brands in 2020, building a portfolio that includes Dressbarn and Linens ‘n Things. They believed they could revive these failing brands by transitioning them to online-only platforms.
However, their fast growth resulted in mounting debt and cash flow issues, as indicated in the lawsuit.
They also began soliciting funds from retail investors during Zoom calls, offering enticing returns despite Rev’s financial losses ballooning from $3.8 million to $12 million monthly.
One former retail executive, Mitchell Model, who sold his century-old family sportswear business to Lopez for $3.6 million, commented, “I can’t say I’m surprised by all this.” He mentioned that he reached out to Lopez shortly after the deal to provide advice.
Model recalled, “I got the impression I was bothering him,” referring to his attempts to connect with Lopez.
Lopez appointed his cousin, Maya Rose Birkenroad, as the president and COO of Rev, boasting about her “10 years of experience” on the company’s website. In reality, her professional background mainly consisted of working as an assistant in his online education business and teaching kindergarten.
The SEC is not pursuing prison time but is requesting the court to order the defendants to repay “ill-gotten gains” and pay a fine.
Rev filed for Chapter 11 in 2023 and was on the brink of liquidation when a major investor, Raj Gupta, took over the company and rebranded it as Omni Media Enterprise in May 2024.
Gupta, who authored $8 and Dreams: My Travels in America, has led various Fortune 500 companies, including the chemical firm Rohm and Haas.
Earlier this year, Gupta attempted to negotiate with Model to purchase the company for $1 million, he recounted to the Post, sharing screenshots of their text exchanges. However, Model offered only $500,000, with no agreement reached.
“I’ll just sell the brand through a broker or license it,” Gupta texted Model in January.
Lopez, Mehr, Gupta, and Birkenroad did not respond to requests for comments promptly.
