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 January 3.
The civil suit, filed Dec. 26 in the U.S. District Court for the Southern District of Florida, accuses Kapoor and his companies Location Ventures, Urbin and 20 related entities in connection with the fraudulent scheme. The Real Deal calls the SEC’s complaint “the culmination of a yearslong investigation into Kapoor’s management of Location Ventures, the Coral Gables-based development company he founded in 2016.”
The SEC claims that Kapoor and some of the “defendant entities solicited investors from January 2018 through at least March 2023. They made “several material misrepresentations and omissions regarding Kapoor, Location Ventures, Urbin and their real estate developments.” The complaint alleges “the misappropriation of at least $4.3 million in investor funds and the improper commingling of approximately $60 million in investor capital between Location Ventures, Urbin and certain of the other entities charged” . The complaint also alleges that Kapoor caused certain entities to pay excessive fees and represent higher returns to investors by significantly underestimating cost estimates.
“As our complaint alleges, Kapoor was the architect of a multi-pronged real estate fraud that embezzled millions from more than 50 investors,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office. “This emergency measure reflects our commitment to protecting investors and holding those who defraud them accountable for their actions. »
Although Kapoor’s LinkedIn page still states that he is the CEO of Location Ventures, The Real Deal reported that he resigned from the position in July.
One of the companies he is associated with is embroiled in a scandal involving Miami Mayor Francis Suarez. He added that the media outlet focuses on commercial and residential real estate in New York, South Florida and Los Angeles. Location Ventures’ subsidiary, Urbino, is involved in paying Suarez “a $10,000-a-month consulting fee for nearly two years when Kapoor sought city approval for a mixed-use co- living and co-working in Coconut Grove,” reports The Real Deal. further revealed that Location Ventures’ remaining investors have tapped retired Judge Alan Fine to liquidate all of its assets to repay its creditors amid an avalanche of lawsuits filed by sellers, law firms and investors involved in the company and its subsidiaries. »
Kapoor has denied any wrongdoing and told The Real Deal that the SEC’s allegation is “both laughable and reckless in its lack of accuracy.” He told the outlet that after months of cooperation with the SEC and then silence for some time, we are deeply disappointed that they took this rash action without further opportunity for dialogue. The allegations, he said, are “advanced by a limited set of adverse relationships and are unfounded, twisted and/or downright false.” According to The Real Deal, Kapoor is also the subject of criminal investigations at the county and federal levels.
The SEC is seeking “permanent injunctions, civil monetary penalties, and an officer and director ban against Kapoor.” Additionally, it seeks “restitution of ill-gotten gains with prejudgment interest against Kapoor and certain of the indicted entities.”
