Ex-employees at RadioShack, Pier 1 Imports blew – Business News
A pair of flashy e-commerce entrepreneurs who purchased bankrupt retailers like Pier 1 Imports, RadioShack, and Modell’s Sporting Goods had been accused by the feds this week of working a Ponzi scheme — and the clampdown got here after ex-employees blew the whistle on them, The Post has discovered.
The duo bilked a whole bunch of traders out of $112 million by Miami-based Retail Ecommerce Ventures or REV, in keeping with a US Securities and Exchange Commission lawsuit filed in Florida federal courtroom on Tuesday.
What the lawsuit didn’t point out is that a group of their former workers had reached out to the SEC in 2023, raising issues about suspicious business dealings, sources mentioned.
Tai Lopez and Alex Mehr standing in entrance of and on the steps of a non-public jet. doctoralex/Instagram
“We have been trying to get someone to expose Tai Lopez and his gang of fraudsters for a long time,” one of the previous worker instructed The Post.
Another former government who resigned after a short stint with REV mentioned (*1*)
In their heyday, Lopez and Mehr confirmed off their wealth and boasted about their financial savvy – earlier than their retail empire started to unravel in 2023, as The Post reported.
Mehr — an Iranian-born immigrant who labored in “risk and safety management of NASA’s space exploration missions” — teamed up with Lopez at the peak of the retail carnage in 2019.
Lopez has a large social media following and incessantly gives financial and self-help advice to his followers.
The duo allegedly misappropriated $16 million in traders funds for his or her personal use, in keeping with the grievance.
Alex Mehr labored in “risk and safety management of NASA’s space exploration missions” earlier than partnering with Lopez.
REV started buying bankrupt retail manufacturers in 2020, amassing a portfolio of eight model licenses that additionally included Dress Barn, RadioShack and Linens ‘N Things. They claimed they may squeeze more juice out of these lifeless manufacturers by reworking them into online-only companies.
But their speedy enlargement left them saddled with debt and little money stream, in keeping with the lawsuit.
What’s more, they started raising capital from particular person traders on twice weekly Zoom calls promising them outsize returns – even because the REV portfolio firms racked up month-to-month web losses from $3.8 million to $12 million, in keeping with the lawsuit.
REV acquired RadioShack out of chapter. Freelance
“I’m not surprised at all about what’s taken place,” mentioned Mitchell Modell, whose century-old household sports activities attire chain was acquired by REV out of chapter for $3.6 million in 2020.
Modell known as Lopez proper after the acquisition to offer him advice in regards to the company’s distributors.
Charlie Gasparino has his finger on the heartbeat of the place business, politics and finance meet
Sign up to obtain On The Money by Charlie Gasparino in your inbox each Thursday.
Thanks for signing up!
“I got the impression that I was bothering him,” Modell instructed The Post.
Lopez employed his cousin – Maya Rose Birkenroad – to be the company’s president and chief working officer, touting her “10 years of experience managing multi-million dollar companies,” on REV’s web site, in accordance the lawsuit.
Pier 1 Imports landed in chapter and was acquired by REV. Christopher Sadowski
But Burkenroad’s solely skilled expertise was as a substitute preschool instructor, a promoter at a radio station, as an assistant to her cousin Lopez in his online schooling company, in keeping with the grievance.
The SEC isn’t searching for jail time however asks the courtroom 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 traders, Raj Gupta, acquired the company and renamed it Omni Media Enterprise in May 2024.
Tai Lopez is prolific on social media the place he gives self-help and financial advice to his followers. Getty Images
Gupta is the writer of Eight Dollars and a Dream: My American Journey, which chronicles his profession main a number of Fortune 500 firms, together with chemical substances company Rohm and Haas.
Earlier this 12 months, Gupta tried to entice Modell to buy his namesake company back for $1 million, Modell instructed The Post, sharing photos of their textual content exchange.
Modell provided $500,000 as a substitute. The two couldn’t attain 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 didn’t instantly reply to requests for remark.
