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.
