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America October 19, 2025 9 mins read

SEC Lawsuit Accuses Tai Lopez and Business Partners of Running a $112 Million Ponzi-Style Investment Scheme

America ı By Samuel Lopez

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Case Intel

  • The SEC filed fraud charges on September 23, 2025 against three executives who allegedly turned a distressed-retail revival venture into a multi-year scheme that misappropriated $16.1 million and paid existing investors with new investor money
  • Between April 2020 and November 2022, the defendants raised $112 million from hundreds of investors by promising annualized returns up to 25% on investments in once-famous brands like Pier 1, RadioShack, and Dress Barn
  • Defendants' answer to the complaint is expected in the coming weeks, as the case moves through the Southern District of Florida with potential civil penalties, disgorgement orders, and permanent bars from serving as corporate officers or directors

MIAMI, FL - The Securities and Exchange Commission has accused the co-founders of a Florida-based holding company of orchestrating a sprawling securities fraud that transformed nostalgic retail brands into vehicles for investor deception, according to a 31-page civil complaint filed in federal court late last month.

Taino Adrian Lopez, 49, and Alexander Farhang Mehr, 46—co-founders of Retail Ecommerce Ventures LLC (REV)—along with Tai’s cousin and the company's Chief Operating Officer Maya Rose Burkenroad, 38, are charged with defrauding approximately 660 investors nationwide through fraudulent offerings tied to eight portfolio companies bearing household names from retail's past.

REV's pitch was elegant in its simplicity: buy bankrupt retail brands cheap, strip away brick-and-mortar overhead, and convert them into lean e-commerce operations. In promotional videos circulated online, Lopez described the strategy as "one of the best strategies you can invest in."

The defendants acquired and managed eight recognizable retail names—Pier 1 Imports, RadioShack, Dress Barn, Modell's Sporting Goods, Stein Mart, Linens 'N Things, Franklin Mint, and a software company called Brahms—all operating out of Miami Beach headquarters.

Between 2020 and 2022, the trio sold unsecured promissory notes and equity stakes (membership units) to investors, promising extraordinary returns: annualized interest rates ranging from 10% to 25%, and monthly dividend payments as high as 2.083%. The purported purpose was straightforward: raise capital to acquire each distressed brand and fund its online relaunch.

A Facade of Profitability

According to the SEC's complaint, Lopez and Mehr maintained an aggressive marketing campaign built on fabricated success stories. During twice-weekly Zoom calls with investors and at in-person conferences in Puerto Rico, Virginia, and Las Vegas, the defendants painted a rosy picture of thriving operations.

In a February 2021 email to all investors, Lopez claimed Dress Barn and Stein Mart were "on fire" with "strong cash flow," and boasted that unlike "public companies operating at heavy losses," REV had "brands with a positive EBITDA" (earnings before interest, taxes, depreciation, and amortization).

Internal financial records tell a starkly different story. Dress Barn lost $13.7 million in 2020 and $10.7 million in 2021. Stein Mart bled $1.7 million and $5.7 million in the same years. According to consolidated income statements, REV and its portfolio companies collectively hemorrhaged between $3.8 million and $12 million monthly during the twelve months ending October 2022.

The defendants also repeatedly assured investors that REV had "never missed a single payment" to any investor—a claim the SEC alleges was demonstrably false by early 2022, when complaints about missing interest payments were already surfacing.

Commingled Funds and Company-to-Company Shuffles

The complaint details a pattern of fund misuse that violated the defendants' own written agreements with investors. Although offering documents specified that proceeds raised for each portfolio company would be used solely for that company's operations, the reality was far messier.

Lopez, Mehr, and Burkenroad maintained signatory authority over all REV and portfolio company bank accounts. Weekly spreadsheets prepared by REV's head bookkeeper tracked cash balances, expenses, and investor payment obligations across all entities. Burkenroad would share these reports with Lopez and Mehr, and the trio would collectively decide which accounts to tap to cover shortfalls elsewhere.

According to the complaint, the mechanics of the shell game were simple but effective. On February 4, 2022, for example, the defendants transferred $1.41 million from RadioShack's bank account to REV's main account. That same day, REV distributed just over $1 million across five other portfolio companies: $615,000 to Pier 1, $185,000 to Modell's, $225,000 to Dress Barn, $16,000 to Franklin Mint, and $10,000 to Linens 'N Things.

At other times, money moved directly between portfolio companies. In November 2020, $1.7 million in RadioShack investor proceeds was transferred straight into Stein Mart's bank account. In total, the SEC alleges the defendants shifted at least $5.9 million in investor funds directly between portfolio companies—all contrary to representations made in offering documents.

Classic Ponzi Mechanics

None of the REV retailer brands generated profits, according to the complaint. To maintain the illusion of a functioning business model, the defendants resorted to paying earlier investors with money from later investors—the hallmark of a Ponzi scheme.

From July through October 2022 alone, the defendants directed at least $5.9 million in new investor funds to pay interest, dividends, and principal to earlier investors. As the portfolio expanded and the number of investors grew, so did the amount of promised returns and maturing notes. The scheme became unsustainable.

By August 2022, investor payments began arriving late. By September, payments stopped en masse. Yet even as financial collapse loomed, the defendants continued soliciting new investors.

The November 2022 Las Vegas Push

In November 2022—with REV already missing investor payments—Lopez and Mehr hosted an investor conference in Las Vegas, promoting new offerings and touting the financial success of their strategy. They disclosed nothing about the portfolio companies' struggles or missed payments.

Immediately following the conference, Mehr sent an email urging investors to act quickly, using gambling metaphors: "We're going all in on REV and we want you to join us at the table. We've already been dealt a pretty strong hand with all the ace brands we've acquired... If you don't want to look like a joker, then the time to get in on REV is now... Don't call our bluff, this deal folds this Friday, November 11th."

Shortly after that email blast, the defendants stopped hosting investor calls altogether. On December 15, 2022, Lopez finally disclosed during a Zoom call that REV and its portfolio companies were in financial trouble, unable to make investor payments, and exploring restructuring or asset sales.

By December 29, 2023, secured noteholders foreclosed on REV and the portfolio companies, transferring the assets to an unrelated entity called Omni Retail Enterprises, LLC. All eight REV retailer brands are now insolvent.

Personal Enrichment

Beyond the Ponzi-like investor payments, the SEC alleges Lopez and Mehr misappropriated approximately $16.1 million for personal use—$12.5 million to Lopez and $3.6 million to Mehr.

Much of Lopez's alleged misappropriation flowed through TAL Promotions LLC, a company he wholly owned that had no affiliation with REV or its portfolio companies and provided no services to either. The funds were transferred for "no apparent business purpose," according to the complaint.

Fabricated Credentials

The defendants also allegedly misled investors about the experience of key personnel. REV's public website, controlled by Lopez and Mehr, described Burkenroad—Lopez's cousin—as having "over 10 years of experience managing multi-million-dollar companies."

In reality, before joining REV as President and COO, Burkenroad had worked as a substitute preschool teacher, a radio station promoter, and an assistant to Lopez in his online education company. The SEC alleges she had "no identifiable experience managing any company."

The Legal Framework

The complaint charges Lopez and Mehr with violating multiple provisions of federal securities law, including Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5 thereunder. These provisions prohibit fraudulent schemes, material misstatements, and deceptive practices in connection with securities offerings.

Burkenroad faces charges under Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) and Rules 10b-5(a) and (c) of the Exchange Act. She is also charged with aiding and abetting Lopez's and Mehr's violations of Section 17(a)(2) of the Securities Act and Section 10(b) and Rule 10b-5(b).

The distinction in charges reflects the SEC's theory that while Lopez and Mehr orchestrated the fraud directly, Burkenroad provided substantial assistance by managing financial operations and facilitating fund transfers between portfolio companies.

What's Next

The defendants have not yet filed answers to the complaint. Under federal civil procedure rules, they typically have 21 days from service to respond, though extensions are common in complex securities cases.

The SEC is seeking:

  • Permanent injunctions prohibiting the defendants from future securities law violations
  • Disgorgement and prejudgment interest from Lopez and Mehr for all ill-gotten gains
  • Civil monetary penalties against all three defendants
  • Officer-and-director bars permanently prohibiting all defendants from serving as officers or directors of public companies

The case will proceed in the U.S. District Court for the Southern District of Florida before a judge yet to be assigned. The docket number is 1:25-cv-24356.

If the SEC prevails, Lopez and Mehr could face substantial financial judgments. Civil penalties for securities fraud can reach millions of dollars per violation, and disgorgement orders would require them to return misappropriated funds plus interest. The officer-and-director bars would effectively end any future involvement in publicly traded companies.

Settlement discussions are possible at any stage, though the scope of the alleged fraud—spanning multiple years, hundreds of investors, and more than $100 million—makes an early resolution less likely. The SEC may also refer the matter to the U.S. Department of Justice for potential criminal prosecution, though no criminal charges have been announced.

Discovery in the civil case will likely focus on bank records, investor communications, internal financial statements, and testimony from REV employees and investors. The SEC has already obtained extensive documentation, as evidenced by the detailed financial allegations in the complaint.

Trial, if the case proceeds that far, would likely occur in 2026 or later given the complexity of the allegations and the volume of potential evidence and witnesses.

Sources

🛑 It should be noted that the assertions in this civil complaint are merely allegations and have not been proven in a court of law. The defendants are presumed innocent unless and until the SEC proves its claims by a preponderance of the evidence.

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