Indian American real estate developer charged in $93m fraud

AN Indian American real estate developer has been charged by federal authorities with perpetuating a $93 million fraud scheme.

Rishi Kapoor, a Miami-based developer, faces charges filed by the Securities and Exchange Commission on Wednesday (3).

The SEC announced that it obtained an asset freeze and other emergency relief concerning the alleged fraud perpetrated by Kapoor.

The SEC also charged real estate company Location Ventures, its affiliate Urbin and 20 other related entities in connection with the fraud scheme, a statement said.

According to the SEC's complaint, from around January 2018, until at least March 2023, Kapoor and certain of the defendant entities solicited investors by, among other things, making several material misrepresentations and omissions regarding Kapoor, Location Ventures, Urbin, and their real estate developments.

The false statements allegedly included misrepresenting Kapoor's compensation; his cash contribution to the capitalisation of Location Ventures; the corporate governance of Location Ventures and Urbin; the use of investor funds; and Kapoor's background.

The SEC's investigation found that Kapoor allegedly misappropriated at least $4.3m of investor funds and improperly commingled approximately $60m 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.

The complaint alleges that he purchased a 68.7 foot yacht for $5m and leased an uber-luxury sportscar.

"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.

The SEC's complaint, filed in the US District Court for the Southern District of Florida, charges Kapoor, Location Ventures, Urbin, and the 20 related entities with violating provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

The SEC seeks permanent injunctions, civil monetary penalties, an officer-and-director bar against Kapoor, and disgorgement of ill-gotten gains with prejudgment interest against Kapoor and certain of the charged entities.

(PTI)