Investors fall victim to alleged $112M retail Ponzi scheme: Trial Balance

Core Insights - The founders of Retail Ecommerce Ventures (REV) have been charged with orchestrating a $112 million Ponzi scheme involving several distressed retail brands [2][3] Group 1: Allegations and Charges - The SEC filed a complaint against Tai Lopez, Alex Mehr, and Maya Burkenroad for raising funds through fraudulent securities offerings from April 2020 to November 2022 [3][4] - The SEC claims that the defendants misled investors about the profitability of the acquired brands, which were actually not generating profits [6][7] Group 2: Investment Strategy and Returns - Investors were offered unsecured notes with annualized returns of up to 25% and equity stakes with monthly dividends over 2% [4] - REV promoted an aggressive turnaround strategy, converting acquired brands into online-only businesses and promising high returns based on supposed strong cash flow [5] Group 3: Financial Mismanagement - To maintain the illusion of success, the defendants allegedly paid existing investors using funds from new investors, merchant cash advances, and loans, with at least $5.9 million in returns funded in this manner [6] - Internal financial statements revealed significant losses for brands like Dressbarn and Stein Mart, contradicting the positive claims made to investors [7]