E-Commerce Entrepreneurs Accused of Ponzi Scheme
Two high-profile e-commerce founders, who recently acquired notable brands like Pier 1 Imports and RadioShack, are facing serious allegations of operating a $112 million Ponzi scheme, as detailed in a recent lawsuit.
The Securities and Exchange Commission (SEC) claims that the founders of Retail E-Commerce Ventures (Rev), Alex Mail and Ty Lopez, defrauded investors in a significant way.
Known for their efforts in transforming traditional retail brands into online entities, Mehr and Lopez have built a diverse business portfolio, which also includes brands like Dressburn and Modell’s Sporting Goods.
Mehr, who was born in Iran, was previously involved in risk management for NASA’s space missions. He connected with Lopez during the tumultuous retail landscape of 2019, a year when around 10,000 stores closed down.
Lopez, on the other hand, is a recognized social media figure and author of self-help books, including one titled “67 Steps,” which focuses on strategies for achieving wealth influenced by notable personalities like Bill Gates and Gandhi.
One notable acquisition by Rev was RadioShack in 2020, occurring three years after the company’s second bankruptcy.
The lawsuit states that the duo allegedly “materially misrepresented” the performance of their brands to hundreds of investors from 2020 to 2022. They also purportedly misled potential investors about their funds, claiming that investments would specifically benefit the company in question.
Despite some revenue generation from their retail brands, the lawsuit emphasizes that none turned a profit. It highlighted the contradiction in their claims, as the funds collected were instead used for obligations linked to their other ventures.
Moreover, the SEC indicated that at least $5.9 million in returns to investors were essentially paid using funds from other investors, a hallmark of Ponzi schemes. They also alleged that Mehr and Lopez took $16.1 million for personal use.
As of now, neither Lopez nor Mehr has responded to requests for comments regarding these allegations.
