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Buyers of Radio Shack, Pier 1 brands accused of running $112M Ponzi scheme (www.cbsnews.com)

submitted 13 hours ago by PhilipTheBucket@piefed.social to c/usnews@beehaw.org

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[–] chiocciola@lemmy.cafe 2 points 13 hours ago (1 children)

What makes it a Ponzi scheme is that they intended to defraud investors. This sounds more like a bunch of idiots who had to borrow from Peter to pay Paul.

[–] PhilipTheBucket@piefed.social 2 points 12 hours ago

The SEC's suit alleges that between 2020 and 2022, Mehr and Lopez, "made material misrepresentations" to hundreds of investors about the bankrupt retailers they had acquired. For example, to entice individuals to invest in their acquisitions, they said their portfolio companies were "on fire" and that "cash flow is strong." They also told prospective backers that money raised for a company would only be invested in that specific firm. That proved not to be the case

Of course, who knows whether it is true, although it sounds plausible. But absolutely it sounds like they intended to defraud investors.