Real Estate Developer in Florida Charged in $93 Million Investment Fraud Scheme
On January 3rd, 2024, the Securities and Exchange Commission (SEC) announced securities fraud charges against Rishi Kapoor, a Miami-based real estate developer. Mr. Kapoor was accused of using nearly two dozen companies to carry out a $93 million investment fraud scheme. An immediate asset freeze was also obtained by regulators. The federal agency is prepared to seek all available remedies in this case to protect the interests of affected investors. Here, our Miami investment fraud lawyer provides a more comprehensive overview of the civil charges filed by the SEC.
The SEC Complaint: Massive Real Estate Investment Fraud Scheme in South Florida
The SEC filed its complaint in the United States District Court for the Southern District of Florida on December 27th, 2023. It was originally sealed to the public, though it was unsealed a week later. The SEC contends that Miami real estate developer Rishi Kapoor used a Location Ventures LLC, Urbin LLC, and nearly two dozen other companies that he owned and controlled to carry out a massive investment fraud scheme. The SEC complaint argues that the investment fraud scheme started in January of 2018 and lasted until at least March of 2023.
Allegations: Misrepresentations Were Made, Funds Were Commingled and Misused
During the relevant time period, federal regulators contend that Mr. Kapoor raised approximately $93 million from at least 50 different investors. Many of the investors were located in South Florida. Though the affected parties extend far beyond the region. The SEC alleges that Mr. Kapoor raised the funds from investors through his companies for the purported purpose of developing real estate in the Miami area, including single family homes, condominium projects, and mixed-use properties.
The investors were promised passive income. They were also enticed by the representation that Mr. Kapoor and his business partners made personal investments totaling nearly $13 million. However, the SEC alleges that these investments were never actually made. Instead, Mr. Kapoor reportedly used a web of complex transactions between his companies to conceal that $13 million shortfall in cash due to his lack of personal investment in the project.
The SEC also contends that funds were commingled in violation of corporate law and that a significant amount of investor money was simply siphoned off. The SEC notes that around $60 million in investor money was improperly commingled throughout the nearly two dozen real estate companies. According to the SEC, Mr. Kapoor misappropriated around $4.3 million in investor funds.
Contact Our Miami Real Estate Investment Fraud Attorney Today
At Carlson & Associates, P.A., our Florida investment fraud attorney is laser-focused on protecting the legal rights and financial interests of clients. If you suffered losses in any real estate investment fraud scheme, we are more than ready to review your case and determine the next steps. Contact us today to set up your confidential consultation. From our Miami law office, we fight for the rights of investors degraded in real estate investment fraud schemes throughout Florida.
Source:
sec.gov/news/press-release/2024-2