RadioShack, Modell's, Pier 1 Caught in $112M Fraud
When you hear about iconic retail brands like RadioShack, Pier 1 Imports, and Modell's Sporting Goods being snapped up and revived, it's easy to imagine a savvy business move — rescuing beloved names from the brink and transforming them into digital success stories. But what if that revival was just a façade for a much darker scheme? That's exactly what the US Securities and Exchange Commission (SEC) alleges in a complaint filed in September 2025, accusing Alex Mehr and Taino Lopez, co-founders of Retail Ecommerce Ventures (REV), of orchestrating a $112 million Ponzi-style fraud under the guise of retail resurrection.
The Promise of Revival
REV's business model seemed straightforward and promising. The company identified struggling or bankrupt retailers with strong brand recognition and purchased their assets, aiming to convert these traditional brick-and-mortar stores into thriving e-commerce businesses. Brands like RadioShack, Pier 1 Imports, Modell's Sporting Goods, Dress Barn, and Stein Mart were all part of REV's portfolio, creating an impressive lineup of retail names that many consumers still recognized and trusted.
Investors were drawn in by REV's pitch, which painted a picture of a company on the rise. Promotional materials and presentations touted the portfolio companies as "on fire," with strong cash flow and a bright future in the digital marketplace, as reported by PEOPLE. The promise was clear: invest in REV, and you'd be part of a retail renaissance, reaping profits from these revitalized brands.
The Reality Behind the Curtain
However, according to the SEC's complaint, the reality was starkly different. None of the portfolio companies generated profits during the period from 2020 to 2022. Instead of genuine business success, REV's financials were propped up by a complex web of loans from outside lenders, merchant cash advances, and, crucially, money raised from new and existing investors. This financial juggling act masked the true state of the business and created the illusion of profitability.
According to PEOPLE, the SEC alleges that "at least $5.9 million" of the returns paid out to investors were actually Ponzi-like payments — funds taken from new investors to pay earlier ones, rather than profits earned through business operations. This classic hallmark of a Ponzi scheme kept the illusion alive, but it was unsustainable and deceptive.
Personal Gain Amid Investor Losses
Adding to the gravity of the allegations, the SEC claims that Mehr and Lopez diverted approximately $16.1 million of investor funds for their personal use. This misuse of funds not only betrayed investor trust but also highlighted the personal enrichment at the heart of the scheme.
The complaint also reportedly names Maya Burkenroad, REV's chief operating officer and Lopez's cousin, as a defendant. While Burkenroad was presented as an experienced executive managing multimillion-dollar companies, the SEC points out her previous roles included being a substitute preschool teacher and a radio station promoter, as reported by Bloomberg, raising questions about her qualifications for the role she held at REV.
Legal Actions and Consequences
The SEC is seeking civil monetary penalties, disgorgement of ill-gotten gains, and a court order barring Mehr, Lopez, and Burkenroad from serving as officers or directors in any public company. These measures aim to hold the defendants accountable and prevent them from repeating such alleged misconduct in the future.
REV's story also includes a twist regarding RadioShack's ownership. The brand is currently owned by Grupo Unicomer, a multinational retail and financial services company operating in 20 countries. Unicomer acquired RadioShack's intellectual property and franchise contracts for Central and South America and the Caribbean in 2015 and expanded ownership to about 70 countries, including the US, Canada, Europe, and China, in 2023. This current ownership has no ties to REV or its executives, clarifying that the alleged fraud is separate from RadioShack's ongoing operations.
What This Means for Investors and the Retail Industry
For investors, this case is a cautionary tale about the risks of chasing turnaround stories without thorough due diligence. The allure of investing in recognizable brands with a digital makeover can overshadow the need for transparency and verified profitability. The SEC's allegations remind you to look beyond the surface and question the sustainability of business models, especially when returns seem too good to be true.
For the retail industry, the case underscores the challenges of reviving legacy brands in a rapidly evolving market. While digital transformation is essential, it requires more than just acquiring a name and launching an online store. Genuine operational success, sound financial management, and honest communication with investors are critical.
Looking Ahead
As the SEC pursues its case, the outcomes will be closely watched by investors, regulators, and the retail sector alike. The allegations against Mehr, Lopez, and Burkenroad serve as a stark warning about the potential for fraud disguised as business innovation. For you, whether an investor or a consumer, staying informed and vigilant is key to navigating the complex landscape of modern retail and investment opportunities.
In the end, the story of Retail Ecommerce Ventures is a dramatic example of how the promise of revival can sometimes mask reckless schemes.
References: Entrepreneurs Accused of Ponzi Scheme Around Reviving Retailers | SEC Accuses Owner of Modell's, Pier 1 Imports of $112M Ponzi Scheme - Retail TouchPoints | Reviving RadioShack Online Turned Into Ponzi Scheme, SEC Claims
