An Influencer's False Promise to Make His Followers Rich

0:00Hey, everyone. It's Jess.

0:02Ryan Knutson:And Ryan. We have a live event coming up that you do not want to miss. It's in Los Angeles on Tuesday, April 28th at the El Rey Theater. We'll have Emmy winner and Oscar-nominated actor Riz Ahmed. Who was in the Star Wars movie Rogue One. And TV and film producer Franklin Leonard. We'll be talking about the future of Hollywood, and we'll have a few other surprises. Tickets are still available. Grab yours now via the link in our show notes. See you April 28th.

0:34Ryan Knutson:Our colleague Suzanne Kappner covers the retail industry. And in 2021, a new company wanted to pitch her a story. The company was called Rev, which stood for Retail E-Commerce Ventures. And they had reached out to me saying, hey, you know, talk to us. We have this great business model. This company was buying up all these, you know, defunct retailers who had filed for bankruptcy, who were struggling to survive. RadioShack, Pier One, the list goes on. Dress Barn, Modell Sporting Goods. As you were listing off those names, I could just like see myself walking down a mall in like 1997 and like I can see the logos.

1:16Ryan Knutson:It's just like a who's who of 90s mall brands. 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. We're getting them on the cheap. It won't be so hard to turn them around. We're going to close all their brick-and-mortar stores. We're going to turn them into online players. And it's going to be so easy to make this successful. To learn more, Suzanne hopped on a Zoom call with the company's founders. One of them was an online influencer named Tai Lopez. He was very smooth. He's a good-looking guy. He's well-spoken.

1:53He's a consummate salesman. And so he does make a nice presentation.

2:01Ryan Knutson:But after hearing Lopez's pitch, Suzanne ended up passing on the story. I just really didn't buy into what they were doing. It just didn't sound, it sounded a little bit too much like smoke and mirrors and not enough like a real business plan. Like it didn't really pass the sniff test for you as a Wall Street Journal reporter. It did not pass the sniff test, exactly. You know, I'm used to talking to people who have been in this business a long time, who kind of know the ins and outs of retailing, and he is not that. He doesn't have those chops. But Lopez's idea did pass the sniff test for some of his online followers.

2:35Ryan Knutson: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. And a few years later, the Securities and Exchange Commission filed a lawsuit alleging that Tai Lopez was running a massive Ponzi scheme. You know what my takeaway is? What? Is that Suzanne Kepner has a good nose.

3:14Ryan Knutson:Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Friday, April 17th.

3:27Ryan Knutson:Coming up on the show, an influencer's retail empire that never was.

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4:46Ryan Knutson:If you've heard of Tai Lopez at all, you probably know him from one particular YouTube video. It's called Here in My Garage. Here in my garage, just bought this new Lamborghini here. It's fun to drive up here in the Hollywood Hills. But you know what I like a lot more than materialistic things? Knowledge. And then the camera pans over to this wall filled with books, bookshelves. It's like the billionaire Warren Buffett says, the more you learn, the more you earn. He talks about how he reads all these books and there's like a simplicity about it that was just genius. Here in my garage was all over YouTube in the mid-2010s.

5:28Ryan Knutson:And it spawned a whole genre of videos that poked fun at Lopez's humble brag. Here in my garage, just bought this new Honda Civic here. Had all these bookshelves installed out in my garage like a crazy person, so I could show you the Lamborghini and the books at the same time. But you know what I like a lot more than materialistic things? Materialistic things. Lopez used his videos to promote his online business courses. One of them was called 67 Steps, where for$67 a month, Lopez promised a step-by-step guide to the quote, good life. Lopez also sold in-person seminars where he shared his secrets for getting rich.

6:17Ryan Knutson:What was the story that he was telling about himself and who he was? Well, he is very open about the fact that he's a college dropout and that his father was in prison for selling cocaine and he was raised in a mobile home by his mom. So humble beginnings. It wasn't that long ago that I was in a little town across the country sleeping on a couch in a mobile home with only$47 in my bank account. I didn't have a college degree. I had no opportunities. Lopez said he got his start at an insurance company where he cold-called potential clients. He said his breakthrough came when he figured out how to write snappy copy for Google ads, which generated better leads.

6:56Ryan Knutson:and eventually solid sales commissions. He used that as a launching pad to kind of reframe himself as, you know, this kind of up-from-the-bootstraps businessman, learn how to get rich quick. How can you achieve financial freedom? It's one of the most common questions I get. Lopez's videos gave off an air of luxury. They were set in extravagant mansions with pristine pools. They promoted parties, promising encounters with fashion models. and he showed off his connections with prominent businessmen. All right, guess who stopped by the house today? What's up, Ty? I'm Mr. Mark Cuban. At one point, Lopez filmed the video with former Shark Tank star Mark Cuban.

7:41And they're shooting hoops together on his private basketball court and they're talking about, you know, what it's like to make your first million, first billion. People ask me, what do billionaires do in their downtime? We're sitting here sweating from playing basketball. catching up on email. You always work? This isn't work. It's what I like to do. What he loves to do. And I did reach out to Mark Cuban, and I said, you know, are you friends with this guy? And he said, look, I'm not friends with him. I filmed this video kind of at the request of a mutual friend, and, you know, I regret having done this.

8:14Ryan Knutson:Then, in 2019, Lopez announced his biggest business idea yet. Retail e-commerce ventures, or REV. Lopez partnered with a mechanical engineer named Alex Mayer, who had made his fortune after selling a dating app for$255 million. Retail e-commerce ventures, the idea was a lot of traditional retailers with household brand names like Radio Shack, Pier One, Dress Parn were failing. They were filing for bankruptcy. and Lopez got the idea of buying them on the cheap in bankruptcy and turning them into e-commerce companies that you could save a lot of money if you close the brick-and-mortar stores. You would just, you know, run them as e-commerce players.

9:00Ryan Knutson:This concept, though, of, like, run them as an online retailer, like, was it a crazy idea? It was not a crazy idea. And in fact, Lord & Taylor is now online only. They closed all their brick-and-mortar stores. They exist online, on the web, Bed Bath & Beyond, same thing. Rev's first notable acquisition was Dress Barn, the decades-old women's fashion retailer. Dress Barn had shut down its 544 stores, and Rev bought its e-commerce rights for a mere$5 million. Then COVID hit, and more brick-and-mortar stores went belly up. And Rev went on a shopping spree. This morning's Retail E-Commerce Ventures is announcing the completed acquisition of distressed sports brand Models.

9:50This is the third major retailer along with Pier One.

9:53Ryan Knutson:With all of their acquisitions, Rev started to get a lot of attention. Joining us for this segment, we have Alex Murth of Retail E-Commerce Ventures to discuss e-commerce turning distressed brands into e-commerce powerhouses as well.

10:08Ryan Knutson:To help finance these acquisitions, Lopez asked his millions of followers if they would consider becoming investors. I'm working on buying a massive global brand. If you have at least$10 million, this is a big deal. $10 million. DM me 10M. In one pitch deck Suzanne reviewed, Lopez told people that if they invested$1 million, they'd receive$200 ,000 after the first year, a 20 % return. And, you know, to the average layperson, it makes perfect sense. You know, Radio Shack is a good brand. Let's cut the costs of all the physical stores and just put it online. And you can make money that way. I mean, it seems very plausible.

10:49Ryan Knutson:One of the people who bought in was John Melton. And he's talking these big percentages. And he's talking about it being a billion-dollar brand. And, you know, building up these companies and then selling them and making 10x, 20x. Like, he was talking such a big game. When you trust someone and you're getting returns, that's how you get sucked in. How it all came crashing down is next.

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12:35Ryan Knutson:John Melton lives in Maryland. He and his wife, Nadia, have two kids. John says he's been an entrepreneur for 25 years. And he's something of an influencer himself, posting videos giving business advice. His Instagram bio says he's, quote, slightly addicted to winning. Sometime around 2020, John and his wife came across Tai Lopez's pitch online. Tai was promoting how he's starting this company with Alex Mayer. I remember them saying, like, you know, Tai's this online marketing genius. And of course, again, because we were in that space too, like, we were very familiar with him. And they're talking about how he has FU money.

13:18John started watching more of Lopez's webinars. I think his concept made sense. And I actually think in the beginning he had good intentions. I really do. I think it was initially like, hey, you can buy these businesses, these brands for pennies on the dollar and, you know, not take on the debt, but you could take on the database. You could, you know, go out there and promote and sell through their email list, through social media, through Twitter, you know, now X, whatever. So again, the concept made sense.

13:48Ryan Knutson:John was sold. In the first two years, he and his wife invested around$900 ,000 into Rev. And in the beginning, it was great. We were getting returns every month. I want to say it was about 17 % returns this first couple years. Through weekly Zoom webinars, Lopez kept investors updated on Rev's business. During those updates, Lopez also pitched new ideas. One of those ideas was for a new real estate investment. He's going to start doing real estate syndications where you buy these apartment buildings, you fix them up, you raise the rent, and then you refinance, get your cash back, and then you just, you know, you get cash flow from the renters.

14:31Ryan Knutson:In late October 2022, the day after hearing about the real estate venture, the Melntons wired Lopez$500 ,000. Less than a month later, John got an email with some unsettling news. Everything was grinding to a halt. No more weekly Zooms. No more monthly deposits. And no explanation. And it's not from Ty, it's from some attorney we've never heard of. John started freaking out. By now, he'd invested over$1.4 million with Rev. And he wanted answers. He started sending Lopez a slew of text messages. I follow up with him on the 27th. Hey, bro, is everything okay with Rev? With us recently investing 500K in your new real estate arm, obviously I'm a little concerned.

15:21No response. John messaged again on November 30th. I said, hey, bro, this is not okay, and I need to get my 500K back. Then I wired you ASAP.

15:32Ryan Knutson:He showed me the text chain on his iPhone. It's a wall of blue bubbles, a one-sided conversation. More blue, more blue, more blue. Finally, about a month later, John got a one-line text that read simply, This week we'll have some more updates. But then, nothing. And the wall of one-sided messages continued. And then, question marks, question marks, question marks. I mean, it's just blue for the last few years.

16:05Ryan Knutson:It finally hit John that all of his money was gone. And not just his money. A lot of the people who had invested with Rev were out. One investor said that he lost most of the$175 ,000 he'd put into Rev, money he'd planned to use to pay for college for his two sons. Another investor is out about$300 ,000 and now has to delay his retirement. You know what's so frustrating about the whole thing is he never even mentioned one time that business was, like any of the companies were in trouble. I mean, everything was just so great. In December 2023, a group of Rev's debt holders foreclosed on some of the brands that Rev had acquired.

16:50Ryan Knutson:Pier One, Models, and Dress Barn are now operated by a new entity called Omni Retail Enterprises. These brands still exist as online-only retailers, just without Lopez and his partners. In the fall of 2025, the Securities and Exchange Commission filed a civil lawsuit against Tai Lopez, Alex Mayer, and Lopez's cousin, Maya Birkenrode, who is the company's COO. The SEC accused the trio of, quote, making Ponzi-like payments to investors. According to former employees in the SEC, none of the companies Rev owned were profitable. The SEC says to keep the businesses going and to buy even more brands, they would raise even more money from new investors.

17:32And then they would use that money to pay out to their old investors. So a lot of the money that the original investors received, because some of them did in fact receive money, it was coming from new investors. So, you know, a classic Ponzi scheme.

17:46Ryan Knutson:Lopez, Birkenrod, and their lawyer, Marty Reddy, did not respond to requests for comment. The SEC also declined to comment. Court filings indicate that both sides are in active settlement talks. Tai Lopez hasn't admitted to wrongdoing. A spokesman for Mayer said he believed in Rev's business model and that he put over$5 million of his own money into the company and suffered substantial losses when the business was hit by what he called quote, severe post-pandemic macroeconomic headwinds. According to people familiar with the matter, the FBI is also investigating. No charges have been filed. So what ultimately happened at Rev?

18:27Ryan Knutson:Like, what went wrong? What went wrong was they raised money and made promises that they couldn't keep. They did not have the skills to turn these businesses into profitable ventures. And even, let's just, you know, put the caveat in there that even if they had done everything perfectly, it was still a long shot. You know, this is still a gamble. I think sometimes people think retailing is an easy business because these are brands we're familiar with. But I think it's a little bit of a misunderstood industry and it is incredibly difficult. The margins are thin. The competition is fierce. The barrier to entry is low.

19:06And it is very difficult to run a successful retailer. You know, anytime someone says, look, this is easy, this is a home run, you should think twice and say maybe that's not true. You know, sometimes something sounds legitimate, but it can be hard for the average person to really vet that and know for sure.

19:29Ryan Knutson:As for the Meltons, John says his family will be fine financially. But the whole thing still stings. If those businesses would have just gone belly up and he would have been honest about it, we probably would have been like, hey, you're chopping up as a loss. That sucks. Lesson learned that we just paid our stupid tax. there's a thing I heard a long time ago. They said there's really smart people out there and they're spending all day, every day, trying to figure out how to get your stupid money. And that's true. That's what Ty did. If you could talk to Ty Lopez, what would you say to him? I mean, dude, make it right.

20:11Just do the right thing. I mean, that or you're going to go to jail. At some point, if it's not jail, it's something else. Like karma's at your door, homie.

20:22As for Tai Lopez, he's still putting out content.

20:26Ryan Knutson:He currently has around 3 million followers on Instagram. So the best way to make mega money in the next two years is to copy any corporate non-AI product. He's been a featured guest on YouTube shows with hundreds of thousands of subscribers. I've been teaching people SMMA, social media marketing agency. I own the trademark for it. I've taught, you know, I launched a generation of entrepreneurs off that one concept. And Lopez has his own podcast. The latest episode of the Tai Lopez Show was published in March. Book a call, free, we can talk. You got to be doing at least seven, eight figures. For everybody else, follow my free stuff.