An Influencer's False Promise To Make His Followers Rich

Key Takeaways

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  REV converted defunct brands into e-commerce players

  “This company was buying up all these, you know, defunct retailers who had filed for bankruptcy, who were struggling to survive. Radio Shack, Pier 1, the list goes on, Dress Barn, Modell Sporting Goods. It was a who's who of dead mall brands, really. Their idea was to buy these well-known but failing brands and turn them into digital juggernauts.”

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  Tai Lopez leveraged viral fame to attract investors

  “In fact, 660 mostly small investors provided Rev with over $230 million. Lopez told these investors that they were getting in on the ground floor of something really exciting, with a promise of big financial returns. But that success would never come.”

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  The SEC alleges REV was a Ponzi scheme

  “Lopez told these investors that they were getting in on the ground floor of something really exciting, with a promise of big financial returns. But that success would never come. And a few years later, the Securities and Exchange Commission filed a lawsuit alleging that Tai Lopez was running a massive Ponzi scheme.”

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  Investors were promised impossible twenty percent yearly returns

  “He's talking these big percentages. He's talking about it being a billion-dollar brand and building up these companies and selling them and making 10x, 20x. He was talking such a big game. When you trust someone and you're getting returns, that's how you get sucked in.”

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  Journalists flagged the business model as suspicious early

  “I just really didn't buy into what they were doing. It just sounded a little bit too much like smoke and mirrors, and not enough like a real business plan. It did not pass the sniff test, exactly. I'm used to talking to people who have been in this business a long time, who know the ins and outs of retailing, and he is not that.”

Episode Description

Get your tickets to our L.A. live show here! In 2019, influencer Tai Lopez made a pitch to his social media followers: by buying up distressed retail brands like Radio Shack and Pier 1 out of bankruptcy, they could all get rich. But as WSJ’s Suzanne Kapner reports, the Securities and Exchange Commission accused Lopez of running a “Ponzi-like scheme” through his company, Retail Ecommerce Ventures. Ryan Knutson hosts. Further Listening/Viewing: - Influencer Arielle Charnas’s Fashion Fail - How a Miami Couple Used Empty Mansions to Pocket Millions Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices