I Interviewed Tai Lopez Before the SEC Sued Him. Here's What I Saw

It looks like we might have a second instance of having a scammer on The Owner Meeting podcast.

I interviewed Tai Lopez at his house in Beverly Hills shortly before all of this came out: the $121 million Ponzi scheme the SEC is currently filing suit over. I want to share what happened that day, because a lot of things I thought were just strange at the time make far more sense now. I also read the entire SEC complaint, and there are three items in it that stood out to me as especially problematic.

We usually talk about real estate here. But he was a guest on our podcast, so this is relevant news to the channel, and there are lessons in it for anyone who raises or invests capital.

Why I wanted him on in the first place

I remembered his original ad from back in college: the guy all over YouTube with the Lamborghini and the bookshelf, the whole "the more you know, the more you own" messaging. Knowledge is power. My books are more important than my Lamborghini.

This is the original online guru. I thought it would be interesting to see what business takeaways we could glean from him. I also knew he owns quite a bit of farmland, so I figured we might talk some real estate, some business, some marketing. This should be good.

What I actually saw at the house

He was 40 minutes late to his own meeting.

I was greeted at the mansion by his mom, who was just kind of milling around. There was virtually no staff on site: maybe three people in the whole place.

Then we get into the podcast, and he has no idea who he's interviewing. He doesn't know whether it's on his channel or my channel. He comes in completely unprepared.

At one point he looks behind him and asks the staff why the bookshelves aren't filled yet. "You guys are supposed to fill them with books. Just go to any bookstore. We just have to make it look like I'm reading a lot of books. This is important to my brand."

There's nothing wrong with doing a little branding and marketing. But my first impression was a guy who was completely disorganized. Where's all the staff? Why is he 40 minutes late to his own thing? And the books on the bookshelf (the entire identity of the original ad that made him famous) are decoration. He doesn't read them. It's all for show.

Is that surprising from an online guru and marketer? Honestly, no. But those were the initial impressions.

The interview itself

Once we started, he wanted to open on the US election and his ideas about the presidency. His position: every president should be paid $2 billion so they have no financial interest and aren't a slave to special interest groups. His solution was $500 million a year for four years, and they walk away with two billion.

Cool. Let's talk business.

He transitioned into the Amish. Then into anything except his actual businesses.

Off camera, I'd asked him about his capital raise, because he's doing this genuinely interesting thing where he buys failing brands and revives them through his e-commerce and marketing prowess. That's a real business model worth discussing.

He wouldn't talk about it. He'd switch back to the Amish. Then farmland. Then he wanted me to listen to a frequency tone that's supposed to calm your mind: 852 hertz, which he explained can help quiet the brain.

I'm sitting there thinking: what is happening?

It starts to make more sense in the context of the lawsuit.

What I noticed before I knew anything

Set the legal filing aside for a second. Here's what the visit alone told me.

The whole setup felt off. Why is he running house parties? Why is he back on the podcast circuit? What is he actually doing day to day? What does he need money for: I thought he had already made it.

My read was that he probably has financial problems right now. Skeleton crew, throwing house parties to afford his current lifestyle.

And then the books. Fake. We know he's posing. We know he'll tell a white lie for the brand. On its own, that doesn't tell you all that much about a person. But it sets a tone.

Three things from the SEC complaint

Now add what the SEC has found. Going through the filing, three items stood out to me.

One: multiple investors reported being told the businesses were cash flowing. There are emails where he states the companies are cash flow positive. Then you look at the tax filings for these entities: bleeding $11 million, bleeding $14 million. Negative $14 million is not positive cash flow. I'm not super good at math, but my understanding is that when you put a minus sign in front of multiple millions, that is typically not positive cash flow.

Related to that, investors said he would not release financials, so they couldn't verify what he was telling them in the first place. Which, in hindsight, makes a lot of sense.

Two: out of this massive capital raise, he and his partner paid themselves $16 million.

This is the one that's biggest for me, and I want to be precise about why. You have a business venture. You're buying dying brands and trying to turn them around. Not every business idea makes money. Sometimes you lose money even when you've raised capital. That happens to business people. It's unfortunate, but it is not illegal.

If you lie about it, that's not good. And if you've already enriched yourself to the tune of $16 million while doing it, it becomes a very big deal and raises a lot of questions. He knows it's losing money. He's telling people it's making money. And he's paying himself a great deal out of the raise.

One of the companies filed bankruptcy about six months after purchase. That should be a red flag to investors. It doesn't get brought up. It doesn't get addressed.

Three: he raised more money and used it to pay distributions to the original investors.

Fast forward. You've had multiple years through 2020 and 2021 of massive negative filings. Some of the companies in the portfolio have gone under. So what does he do? He raises more money, and uses money from the new raise, not the nonexistent cash flow from the businesses, to pay distributions to the earlier investors.

Then he markets on the written claim that they've never missed a payment.

Of course you haven't missed a payment. You also haven't made a dollar. But you're telling people you're cash flowing.

That's where this gets into Ponzi scheme territory. You've raised money, you're cooking the books by inserting new capital from new people and calling it cash flow, and then you point at it: look at the strength of our fund, look at the returns, we think we can start hitting these crazy multiples.

The return projection that should have been the first red flag

When he first started marketing this, he listed it as a 20% return on investment year over year, out of cash flow.

That's the first red flag, and it's worth explaining why, because 20% by itself doesn't sound crazy.

A 20% return would be pretty average for a lot of the deals I do in real estate. But it is not all out of cash flow. There's an actual future exit of the building, and the projection is based on actual day-one cash flow.

Here's what that looks like in practice. I come into a building and say it's cash flowing 6% cash on cash on day one, and we know that because of the last few years of financials. That's a positive starting point. Then we probably have some upside in the deal, or a business plan, where we can reasonably project our way to a 20 to 25% return. We can math it out and make those projections based on actual numbers, and we start from real cash flow.

Now compare that to taking a failing brand (say something like a RadioShack) and saying you're going to bring it back online because people love the brand even though they don't need the product. The problem is you're now competing with companies like Amazon. And you're telling investors you're going to take this niche company people used to love, bring it back, and pay them massive returns entirely out of positive cash flow that does not yet exist.

That is a dangerous statement to make.

He's raising money from accredited investors, but doing it in a way where he won't share the financials, and then, according to the complaint, misrepresenting how the money is being made.

What I think was happening

Everything I'm describing here comes from two sources: two hours in person with him at his house, and the SEC filing that came shortly after.

My instinct (and I don't know this for a fact) is that he knew this was coming. The house parties, getting back on the podcast circuit, trying to make all the money he can. I think he was trying to pay everyone back and avoid exactly this outcome. What if I could just earn my way through it?

He dug too deep a hole. I think he's finally out of the game.

I don't celebrate the demise of any person. But at face value, it looks like he came in, he cheated, he tried to recover, and he covered it up with an additional capital raise on a business he knew was going to fail. If that proves to be the case, it's not just unethical: it's illegal.

We may be looking at the end of the original online guru in the education space. At worst, this does enormous damage to the brand. You do not want the headline "SEC sues you for $121 million." Looking through the documents, it looks pretty bleak.

Key takeaways

• Disorganization and staged branding aren't crimes, but they set a tone. A guy filling bookshelves purely for show will tell a white lie for the brand.
• If a sponsor won't release financials, you cannot verify anything else they tell you. That alone should end the conversation.
• Losing investor money is not illegal. Lying about losing it is, especially while paying yourself millions out of the raise.
• "We've never missed a payment" means nothing if the payments come from new investor capital rather than operations.
• Judge return projections by where the return comes from. Real estate deals build from verifiable day-one cash flow plus a business plan and an exit, not from cash flow that doesn't exist yet.
• Red flags stack. Late, unprepared, dodging every question about his own businesses, and a bankruptcy six months post-purchase that never gets addressed.

The full breakdown, including more of what the interview was actually like, is in the video at the top of this post. I'd genuinely like your opinions on this one: leave them in the comments.

If you want to learn the way we underwrite real numbers instead of promises, there's a free multifamily course and information on my mentorship at multifamilystrategy.com, and the free Skool community is open to anyone who wants to be around investors doing the work.

0:00 That 852 sound actually can help quiet the brain. Looks like we might have a second instance of having a scammer on
0:08 the owner meeting podcast. I want your opinions on this, but I'm going to share what happened to me having Tai Lopez on the podcast. Now, I interviewed him at
0:16 his house in Beverly Hills shortly before all this came out for the $121 million Ponzi scheme that the SEC is
0:23 currently filing a suit against Tai Lopez for. I'm going to share my experience there interviewing him what I thought was actually quite strange and I
0:32 read the entire SEC complaint. There are three things that stood out to me among many on a very large document that stood
0:39 out as very problematic for this online guru. By the way, welcome to the owner meeting podcast. I'm Christian, your channel host. It is fantastic to see
0:47 you. Usually we talk all about real estate, but since this was a podcast guest on our owner meeting podcast, I figured this would be a good time to
0:54 share with you guys exactly what's going on. This is relevant news to our channel. So, I'll go ahead and dive all the way in. First of all, I thought this guy was interesting cuz I remember back
1:02 in college with his original ad where this guy was all over YouTube with the Lamborghini and the the bookshelf, the
1:10 more you know, the more you own or whatever the heck his phrase was. But it was all about, hey, knowledge is power.
1:16 My books are more important than my Lamborghini, but the messaging, this is like the original online guru. I thought it would be interesting to see what
1:24 business takeaways we can glean from this guy. And as I know that he owns quite a bit of farmland. I'm like, "Hey, we might be able to talk some real estate, some business, some key takeaways, talk about marketing. This
1:33 should be good." So, I fly out to his house. First thing that I notice, he's 40 minutes late to his own meeting. I'm greeted at the mansion by his mom who's
1:40 just kind of milling around. He has virtually no staff on site. He has like three people. We get into the podcast.
1:47 He has no idea who he's interviewing. He doesn't know if it's on his channel or my channel. He gets in completely unprepared. Looks behind him and tells
1:55 the staff, "Hey, why are the bookshelves not filled yet? You guys are supposed to fill with books. Just go to any bookstore. We just have to make it look like I'm reading a lot of books. This is
2:03 important to my brand." Now, while there's nothing wrong with doing a little bit of branding and marketing, my first impression of this guy, completely
2:10 disorganized. Where's all the staff? Why is he late? and he doesn't read any of the books on his bookshelf. It's all for
2:18 show. Now, is this surprising from an online guru and marketer? No. But those are the initial impressions. Now, we get
2:25 to the actual podcast. I'm interviewing him. He wants to start on the US election and his idea on presidency.
2:32 He's like, "Hey, I think every president should be paid $2 billion so that they don't have financial interest and they're not slave to special interest groups." The solution is the president
2:42 of the United States get paid 500 million a year for four years. They walk with two billion. I'm like, cool. Let's
2:50 talk business. He transitions into the Amish. He transitions into anything but his actual businesses. Now, not in the podcast. I had asked him questions about
2:59 this capital raise because he's doing this interesting thing where he's buying failing brands, reviving them through his e-commerce and marketing proess.
3:07 He won't talk about it. He'll switch back to the Amish. Then he'll talk about farmland. Then he'll talk about, "Hey, listen to this annoying noise. This is
3:14 supposed to calm your mind down." And so you can even try to go into a
3:21 deeper thought process by putting on some of this frequency stuff. Uh it's a resonant. So here's one. It's 852. You
3:30 can hear that sound. That 852 sound actually can help quiet the brain. I'm like, what is happening?
3:39 Well, it starts to make a little bit more sense in context of this lawsuit.
3:42 So, here's what we know from the onset from the podcast. His whole setup feels kind of weird. Why is he running house parties? Why is he back on the podcast?
3:51 What is he actually doing? What does he need the money for? I thought he had already made it. He probably has financial problems going on right now with a skeleton crew and he's throwing
4:00 house parties to afford his current lifestyle. Those are the first few things. Second, all those books fake. We know he's posing. We know he'll tell a
4:08 white lie. That doesn't tell you too much about someone, but it sets the tone. Now, we add the context of what the SEC has found. I'm going to share three things going through the filing.
4:18 Number one, he had reportedly from multiple investors lied that they were cash flowing. And there's emails that where
4:26 he states, "We are cash flow positive." Now, you look at the tax filings for all these entities. bleeding $11 million, bleeding $14 million. Negative $14
4:35 million is not positive cash flow. I'm not super good at math, but my understanding is when you put the minus
4:42 sign in front of the multiple million, that is typically not positive cash flow. That's number one. Second, they
4:51 said he would not release financials, so they couldn't verify what he was saying in the first place, which makes a lot of sense. Number two, and this one's really
4:59 big for me, out of this massive capital raise, he pays himself and his partner $16 million. I think there is something to be said. You have a business venture.
5:08 You're buying these dying brands. You're trying to turn it around. Not every business idea makes money. Sometimes you lose money even when you raise capital.
5:16 It happens to business people. That's not illegal. It's unfortunate, but it's not illegal. If you lie about it, not
5:24 good. If you've already enriched yourself to the tune of $16 million, I think this becomes a big deal and this raises a lot of questions. He knows it's
5:32 losing money. He's telling people it's making money. He's paying himself a lot of money doing this raise. Now, one of
5:40 the companies files bankruptcy about 6 months after purchasing. Should be a red flag. Doesn't bring it up. Doesn't address it.
5:48 Fast forward. You've had multiple years through 2020, 2021, massive negative filings. You've seen some of these companies in the portfolio go under.
5:58 What does he do? He raises more money and he uses money from the raise, not the non-existent cash flow from the business, to pay distributions to the
6:07 original investors. Then he markets off of a written statement. We've never missed a payment. Of course, you haven't
6:14 missed a payment. You also haven't made a dollar, but you're telling people you're cash flowing. This is where we get into the illegal Ponzi scheme territory. This is where you've raised
6:23 money. You're now cooking the books by inserting new capital from new people, calling it cash flow, and looking, look at the strength of our fund. Look at the
6:32 returns of our fund. I think we can start hitting these crazy multiples. In fact, when he first started marketing, he listed this as a 20% return on
6:41 investment year-over-year out of cash flow. That's the first red flag.
6:45 Businesses are bleeding money. his original projections where I'm going to pay you 20% cash flow distributions.
6:52 Now, a 20% return would be pretty average for a lot of the deals that I do in real estate, but it's not all just out of cash flow. There's an actual
7:01 future exit of the building, and it's based on actual day one cash flow. So, I can come into a building and say, "Hey,
7:08 it's cash flowing 6% cash on cash day one that we know we can distribute based on his last few years financials." Positive starting point. We probably
7:16 have some upside in the deal or a business plan where we can reasonably project, hey, we're going to get these 20 25% returns, but we're able to math
7:25 that out and make those projections based on actual numbers and we start out of cash flow. If you take a failing brand like Radio Shack and say, I'm
7:33 going to take this brand and I'm going to bring it back online because people love the brand but they don't need the product. Well, the problem is you're now
7:40 competing with companies like Amazon and you're saying, "Hey, I am going to get this niche company that people used to love. I'm going to bring it back and I'm
7:48 going to pay you massive significant returns and it's all going to be out of positive cash flow that doesn't yes exist." I think that is a dangerous
7:56 statement. He's raising money from accredited investors, but he's doing it in a way where he's not going to share the financials. Then he's going to lie about how they're making money.
8:04 Everything I'm seeing in this statement, and again, this is just based off of my experience in person spending two hours with him in his house and then shortly
8:12 after the SEC announcing this. I think he knew this was coming. My instinct, I don't know this for a fact. My instinct
8:20 is he knew this was coming. He is trying to run these house parties, get the podcast up. I think he's trying to make all the money he can to try to pay back
8:29 his investors to avoid exactly this happening. I think he's trying to pay everyone and just saying, "Hey, what if I could earn my way through?" He's dug too deep of a hole. I think he's finally
8:38 out of the game. I don't celebrate the demise of any person, but it looks like face value. He came in, he cheated, he
8:47 tried to recover, and he covered it up unfortunately with a additional capital raise on a business he knew was going to
8:54 fail. Not only is this unethical, if that proves to be the case, it would be illegal. It looks like we may be looking at a Ponzi scheme and we might see the
9:03 end of the original online guru in the online space, the education space. At worst, this is going to do a lot of
9:10 damage to the brand. You do not want the headline. CC sues you for $121 million.
9:16 Uh, looking through the documents here, I think it looks pretty bleak for Tai Lopez.