With the April 3, 2025 delisting of 1847 Holdings LLC (EFSH), following the prior chapter and delisting of its spinoff Polished.com, it’s time to cease framing these as abnormal enterprise failures. This isn’t a narrative of mismanagement, market volatility, or unlucky investing. That is the unraveling of an almost $700 million, decade-long Ponzi scheme—engineered below the veil of a publicly traded firm, orchestrated by insiders who understood the system and abused it intentionally.
Many regulators instinctively reject the notion that an organization listed on a nationwide alternate and controlled by the SEC could possibly be a Ponzi scheme. However regulation doesn’t equal legitimacy. Within the case of 1847 Holdings, the conduct follows basic Ponzi mechanics. The corporate would typically elevate capital by dilutive public choices—typically by secondary or follow-on choices—and inside roughly 30 to 45 days, subject dividends to shareholders. These dividends weren’t funded by income or free money circulation. They have been funded by the very capital simply raised from new traders, redistributed to prior shareholders below the false pretense of operational success. This cycle occurred a number of occasions within the firm’s early historical past, fastidiously timed to take care of a façade of credibility whereas draining public capital.
Whereas Polished.com didn’t subject dividends, it raised greater than $500 million in simply three years earlier than collapsing. There’s compelling motive to consider that capital raised by Polished was additionally used—straight or not directly—to prop up 1847 Holdings, bridging monetary gaps and sustaining dividends that the corporate couldn’t assist by itself. These entities have been managed by the identical exterior administration agency, 1847 Companions, which operated each firms as automobiles of capital extraction somewhat than development.
The phantasm was additional supported by a collection of manufactured narratives—glowing press releases asserting acquisitions, synergies, or expansions that have been both solely fabricated or grossly misrepresented. Monetary filings have been padded with inconsistencies, questionable changes, and, tellingly, blanket disclaimers citing “materials weaknesses in inner controls.” These disclosures functioned not as an indication of transparency, however as authorized insulation from the inevitable penalties of deception. In the meantime, insiders enriched themselves by administration charges, consulting agreements, most well-liked share preparations, and undisclosed perks, all whereas shareholder worth was systematically destroyed.
Probably the most abusive mechanisms employed was the repeated use of reverse inventory splits—eight in whole. After every cut up reset the share depend and artificially elevated the inventory value, new rounds of poisonous dilution would start. It was a cycle of destruction: reverse, dilute, elevate, repeat. Shareholders have been diluted into oblivion whereas insiders benefited from most well-liked constructions and personal placements. They squeezed each final penny from the general public float, like wringing a lemon dry—then wringing it many times till nothing was left.
On the middle of this scheme was 1847 Companions, managed by Ellery Roberts and Louis A. Bevilacqua. Bevilacqua just isn’t a passive authorized advisor billing for filings. He’s the architect of this fraud. As a licensed lawyer, he used his experience not to make sure compliance, however to construct the authorized and company infrastructure of a publicly traded Ponzi scheme. He structured the acquisitions, drafted the choices, and embedded simply sufficient believable deniability into public filings to protect himself and his companions from instant scrutiny. His position wasn’t supportive—it was foundational.
What makes this extra egregious is that lots of the firms acquired below 1847 Holdings have been decades-old, cash-flow-positive companies—some working for almost a century. These weren’t distressed belongings; they have been viable enterprises that ought to have thrived with lots of of thousands and thousands in capital behind them. As a substitute, they have been looted, saddled with debt, mismanaged by design, and pushed into chapter 11. In 2024 alone, 9 bankruptcies occurred throughout the 1847 and Polished portfolios. The one motive the scheme collapsed was as a result of NYSE guidelines prohibited additional reverse splits, chopping off the ultimate escape route.
For over a yr, I’ve been stating clearly and publicly that this was a Ponzi scheme. The problem is that Ponzi schemes are sometimes invisible to regulators till they turn into prison instances. But when an organization raises cash below false pretenses, makes use of that cash to pay earlier traders, fabricates press and financials, enriches insiders whereas leaving a path of bankruptcies—it doesn’t matter whether or not the scheme was non-public or public. You don’t want the phrase “Ponzi” within the statutes to see what’s occurring. This wasn’t an funding alternative gone unhealthy—it was a fraud with a ticker image.
And this isn’t nearly 1847 Holdings or Polished. This conduct has harmed the broader microcap house. Bankers, legal professionals, and issuers throughout the trade ought to take Louis Bevilacqua’s actions personally. He’s a big a part of the explanation why public markets have turn into tougher to entry for respectable small companies. Guidelines are tighter, scrutiny is larger, and investor belief is weaker—due to people like him. He didn’t simply steal from shareholders; he set again a whole ecosystem.
This isn’t a trivial matter. This isn’t a studying alternative. This is without doubt one of the most brazen, sustained acts of public market fraud in latest reminiscence. Almost three-quarters of a billion {dollars} raised, numerous firms destroyed, and shareholders devastated—whereas insiders walked away enriched. The SEC, DOJ, and FINRA should act. Louis Bevilacqua and Ellery Roberts have to be investigated, and if acceptable, prosecuted. The document is evident. The intent was deliberate. The implications are actual. Now, accountability should comply with.
