The Securities and Exchange Commission charges Rishi Kapoor, an Indian-American real estate developer based in Miami, Florida, with defrauding more than 50 investors who contributed $93 million to his real estate projects. The independent federal agency announced on January 3rd.
The civil suit, filed Dec. 26 in the U.S. District Court for the Southern District of Florida, accuses Mr. Kapoor, his company Location Ventures, Irvin, and 20 related entities in connection with the fraud scheme. The Real Deal calls the SEC’s charges “the culmination of a year-long investigation into the management of Location Ventures, a Coral Gables-based development company that Mr. Kapoor founded in 2016.”
The SEC alleges that Kapoor and some of the defendant companies solicited investors from January 2018 through at least March 2023. He said he had made “misrepresentations and omissions.” According to the complaint, the company “misappropriated at least $4.3 million in investor funds and improperly commingled approximately $60 million in investor funds among Location Ventures, Urbin, and some of the other accused entities.” ” he claims. The complaint also alleges that Mr. Kapur forced some entities to pay excessive fees and grossly underestimated cost estimates to offer higher returns to investors.
“As alleged in our complaint, Mr. Kapur was the mastermind behind a multi-pronged real estate recruitment fraud that embezzled millions of dollars from more than 50 investors,” the SEC’s Miami Regional Office said. Director Eric I. Bustillo said. “This emergency action reflects our commitment to protecting investors and holding accountable those who defraud investors for their actions.”
Although Mr. Kapoor’s LinkedIn page still lists him as CEO of Location Ventures, The Real Deal reported that he resigned from that position in July.
One of the companies he is connected to is involved in a scandal involving Miami Mayor Francis Suarez. He added the news outlet focuses on commercial and residential real estate in New York City, South Florida and Los Angeles. Arvin, an affiliate of Location Ventures, paid “$10,000 a month in consulting fees for nearly two years as Mr. Kapur sought city approval for a co-living and co-working mixed-use project in Coconut Grove.” He was involved in making payments to Suarez, The Real Deal reported. Additionally, Location Ventures said, “While an avalanche of lawsuits has been filed by vendors, law firms, and investors associated with the company and its affiliates, remaining investors are seeking to liquidate all assets to repay creditors. “We have brought in retired judge Alan Fine.”
Mr. Kapoor denies wrongdoing, telling The Real Deal that the SEC’s allegations are “ridiculous and also reckless in their lack of accuracy.” He told the press that he had been working with the SEC for several months and then remained silent for quite some time, and we deeply regret that they took this hasty action without an opportunity for further dialogue. said. He said these claims were “raised by a limited set of adverse relationships and are unsubstantiated, distorted, and/or flat-out false.” According to The Real Deal, Kapoor also faces criminal investigations at the county and federal level.
The SEC is seeking a “permanent injunction, civil penalties, and officer and director ban against Mr. Kapoor.” It also seeks “deprivation of ill-gotten gains with pre-judgment benefits against Kapur and certain of the accused entities.”