That's something many people fail to pay attention to. If things get serious enough and go to a court of law, the court will not respect the corporate veil, if the owners didn't!
It’s not that simple.
You can only sue an entity other than the entity you gave money directly to (or was explicitly listed in the contract) if you can prove that your money was sent to that entity with intent by the defendant and that said defendant controls that entity. For example, if the merchant paid a contractor $100K to remodel his store, you can’t seize the money from that contractor even if you believe that this was your money. But if the merchant moved the money to another business that is also controlled by him, you will need to proof as stated above.
Sometimes in order to prove that, you would first need to sue the entity or person you gave the money to, and once you get a judgement in your favor you can use that for discovery. This process can take many months. Once you can prove that the money was sent to another entity, you would then have to sue that entity. We are talking potentially 1-2 years and tens of thousands in legal expenses.
It’s been mentioned in earlier posts that some investors were given personal guarantees and contracts. Those investors have a clear advantage. Those who swiped with no contract will have an uphill battle. (Uphill battle is unfortunately a massive understatement)