A real estate developer of Indian descent is accused of a USD 93 million fraud scheme
New York: US federal officials have accused a real estate developer of Indian descent of continuing a USD 93 million fraud scheme.
The Securities and Exchange Commission filed accusations against Miami-based developer Rishi Kapoor on Wednesday.
The SEC said that it has secured an asset freeze and other urgent measures in relation to Mr. Kapoor’s alleged USD 93 million real estate investment scam.
In conjunction with the fraud scheme, the SEC also filed charges against 20 additional linked organizations, its subsidiary Urbin, and the real estate firm Location Ventures, according to a statement.
In the SEC’s complaint, it is stated that between roughly January 2018 and March 2023, Mr. Kapoor and some of the defendant companies solicited investors by, among other things, providing multiple materially false and misleading information about Mr. Kapoor, Location Ventures, Urbin, and their real estate developments.
The fraudulent representations purportedly included misrepresenting Mr. Kapoor’s pay, his monetary capitalization contribution to Location Ventures, Urbin’s and Location Ventures’ corporate governance, the usage of investor monies, and Mr. Kapoor’s history.
According to the SEC’s investigation, Mr. Kapoor inappropriately mixed over USD 60 million in investor funding between Location Ventures, Urbin, and a few other accused organizations, and allegedly stole at least USD 4.3 million in investor monies.
Additionally, according to the lawsuit, Mr. Kapoor drastically understated cost projections, which led to certain organizations paying exorbitant fees and representing larger returns to investors.
According to the accusation, Mr. Kapoor and other insiders are accused of stealing at least USD 6 million from investor money, of which USD 4.3 million he took for himself. He rented an ultra-luxury sports vehicle and paid five million dollars for a 68.7-foot boat.
Eric I. Bustillo, Director of the SEC’s Miami Regional Office, said, “As alleged in our complaint, Mr. Kapoor was the architect of a multi-pronged real estate offering fraud that misappropriated millions from more than 50 investors.”
The Securities Act of 1933 and the Securities Exchange Act of 1934 are allegedly violated by Mr. Kapoor, Location Ventures, Urbin, and the twenty associated businesses, according to the SEC’s complaint, which was submitted to the U.S. District Court for the Southern District of Florida.
The SEC is requesting disgorgement of ill-gotten earnings with prejudgment interest against Mr. Kapoor and some of the participants, as well as civil monetary penalties, an officer-and-director ban, and permanent injunctions.
