Securities and Exchange Commission Charges Miami-based Real Estate Developer Rishi Kapoor With Fraud Scheme
- The Indian American allegedly defrauded more than 50 investors who contributed $93 million for his real estate projects.
The Securities and Exchange Commission has charged Miami, Florida-based Indian American real estate developer Rishi Kapoor with allegedly defrauding more than 50 investors who contributed $93 million to his real estate projects, the independent federal agency announced on Jan. 3.
The civil lawsuit, filed on Dec. 26 in the U.S. District Court for the Southern District of Florida, charges Kapoor, and his companies Location Ventures, Urbin, and the 20 related entities in connection with the fraud scheme. The Real Deal calls the SEC complaint “a culmination of a year-long investigation into Kapoor’s management of Location Ventures, the Coral Gables-based development firm he founded in 2016.”
SEC says Kapoor and some of the “defendant entities’ solicited investors from January 2018, until at least March 2023. They made “several material misrepresentations and omissions regarding Kapoor, Location Ventures, Urbin, and their real estate developments.” The complaint alleges that the “misappropriated at least $4.3 million of investor funds and improperly commingled approximately $60 million of investor capital between Location Ventures, Urbin, and some of the other charged entities.” The complaint also alleges that Kapoor caused some entities to pay excessive fees and to represent higher returns to investors by significantly understating cost estimates.
“As alleged in our complaint, Kapoor was the architect of a multi-pronged real estate offering fraud that misappropriated millions from more than 50 investors,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “This emergency action reflects our commitment to protecting investors and holding those who defraud them accountable for their actions.”
Although Kapoor’s LinkedIn page still says he’s the CEO of Location Ventures, The Real Deal has reported that he resigned from the post in July.
One of the companies he is associated with is involved in a scandal involving Miami Mayor Francis Suarez. He added the news outlet focusing on commercial and residential real estate in New York City, South Florida, and Los Angeles. Location Ventures’ affiliate, Urbin, is involved in paying Suarez “a $10,000 a month consulting fee for nearly two years when Kapoor sought city approvals for a co-living and co-working mixed-use project in Coconut Grove,” The Real Deal report further revealed that Location Ventures ‘“remaining investors brought in retired judge Alan Fine to liquidate all of its assets to pay off creditors amid an avalanche of lawsuits filed by vendors, law firms and investors involved with the company and its affiliates.”
Kapoor has denied wrongdoing, and told The Real Deal that the SEC’s allegation is “both laughable and reckless in its lack of accuracy.” He said to the news outlet that after months of cooperation with the SEC, and then silence for quite some time, we are deeply disappointed that they have taken this rash action without further opportunity for dialogue. The allegations, he said, are “put forward by a limited set of adverse relationships, and are unfounded, twisted and/or flat out false.” Per The Real Deal, Kapoor is also facing criminal investigations at the county and federal level.
The SEC is seeking “permanent injunctions, civil monetary penalties, an officer-and-director bar against Kapoor.” Additionally, it seeks “disgorgement of ill-gotten gains with prejudgment interest against Kapoor and certain of the charged entities.”