A pair of flashy e-commerce entrepreneurs who bought bankrupt retailers like Pier 1 Imports, RadioShack, and Modell’s Sporting Goods were accused by the feds this week of running a Ponzi scheme — and the clampdown came after ex-employees blew the whistle on them, The Post has learned.
The duo bilked hundreds of investors out of $112 million through Miami-based Retail Ecommerce Ventures or REV, according to a US Securities and Exchange Commission lawsuit filed in Florida federal court on Tuesday.
What the lawsuit didn’t mention is that a group of their former employees had reached out to the SEC in 2023, raising concerns about suspicious business dealings, sources said.
“We have been trying to get someone to expose Tai Lopez and his gang of fraudsters for a long time,” one of the former employee told The Post.
Another former executive who resigned after a short stint with REV said “I felt I’d be compromising myself by continuing to work there. It’s possible that I witnessed something illegal. I’ve never worked for a company promising to pay investors 20% and chartering jets and flying all over the country.”
In their heyday, Lopez and Mehr showed off their wealth and boasted about their financial savvy – before their retail empire began to unravel in 2023, as The Post reported.
Mehr — an Iranian-born immigrant who worked in “risk and safety management of NASA’s space exploration missions” — teamed up with Lopez at the height of the retail carnage in 2019.
Lopez has a massive social media following and frequently offers financial and self-help advice to his followers.
The duo allegedly misappropriated $16 million in investors funds for their personal use, according to the complaint.
REV began acquiring bankrupt retail brands in 2020, amassing a portfolio of eight brand licenses that also included Dress Barn, RadioShack and Linens ‘N Things. They claimed they could squeeze more juice out of these dead brands by transforming them into online-only businesses.
But their rapid expansion left them saddled with debt and little cash flow, according to the lawsuit.
What’s more, they began raising capital from individual investors on twice weekly Zoom calls promising them outsize returns – even as the REV portfolio companies racked up monthly net losses from $3.8 million to $12 million, according to the lawsuit.
“I’m not surprised at all about what’s taken place,” said Mitchell Modell, whose century-old family sports apparel chain was acquired by REV out of bankruptcy for $3.6 million in 2020.
Modell called Lopez right after the acquisition to offer him advice about the company’s vendors.
“I got the impression that I was bothering him,” Modell told The Post.
Lopez hired his cousin – Maya Rose Birkenroad – to be the company’s president and chief operating officer, touting her “10 years of experience managing multi-million dollar companies,” on REV’s website, according the lawsuit.
But Burkenroad’s only professional experience was as a substitute preschool teacher, a promoter at a radio station, as an assistant to her cousin Lopez in his online education company, according to the complaint.
The SEC is not seeking jail time but asks the court to order the defendants to return their “ill gotten gains” and to pay a penalty.
REV filed for Chapter 11 in 2023 and was about to liquidate when one of its largest investors, Raj Gupta, acquired the company and renamed it Omni Media Enterprise in May 2024.
Gupta is the author of Eight Dollars and a Dream: My American Journey, which chronicles his career leading several Fortune 500 companies, including chemicals company Rohm and Haas.
Earlier this year, Gupta tried to entice Modell to purchase his namesake company back for $1 million, Modell told The Post, sharing images of their text exchange.
Modell offered $500,000 instead. The two couldn’t reach a deal.
“I will sell the brand thru a banker or just license it out,” Gupta texted Modell in January.
Lopez, Mehr, Gupta and Birkenboard did not immediately respond to requests for comment.
