Entrepreneurs Facing Accusations of Ponzi Scheme Involving Revitalizing Retailers

roach as ‘one of the best strategies you can invest in.’ They further assured investors that while other businesses may be struggling, their portfolio companies were thriving, with strong cash flow. However, according to the SEC, none of their portfolio companies actually made any profits.

To cover up their losses, Mehr and Lopez used various methods, including loans from outside lenders, merchant cash advances, money from new and existing investors, and transfers from other portfolio companies. The SEC claims that at least $5.9 million of the returns distributed to investors were actually made using funds from other investors, resembling a Ponzi scheme.

The complaint also revealed that the duo took $16.1 million in investor funds for their personal use. The Chief Operating Officer of REV, Maya Burkenroad, was also named in the complaint. The SEC is seeking civil monetary penalties, disgorgement of ill-gotten gains, and a prohibition on them acting as officers or directors in other companies.

Despite these allegations, Mehr, Lopez, and Burkenroad could not be reached for comment on the matter. It is clear that the promises made by these entrepreneurs to revive well-known brands like RadioShack, Pier 1, and Modell’s were not fulfilled, and instead, investors were defrauded and misled.

This case serves as a reminder to investors to conduct thorough due diligence and research before investing in any business venture, especially if it involves distressed companies. The SEC’s actions against Mehr and Lopez highlight the importance of integrity and honesty in business dealings. Investors must be cautious of promises that seem too good to be true and ensure that all investments are made with a clear understanding of the risks involved. The consequences of falling victim to schemes like these can be devastating, both financially and emotionally.

As the legal proceedings continue, it remains to be seen what the outcome will be for Mehr, Lopez, and Burkenroad. The allegations of fraud, misrepresentation, and personal use of investor funds are serious and could have significant repercussions for all parties involved. It is a cautionary tale for both investors and entrepreneurs about the importance of transparency, ethical conduct, and accountability in the business world.