Builder of Indian origin accused of orchestrating a $93 million fraud scheme in the U.S.

In the United States, federal authorities have levelled charges against Rishi Kapoor, an Indian-origin real estate developer, for allegedly orchestrating a massive $93 million fraud scheme. The Securities and Exchange Commission (SEC) filed charges against Kapoor, who is based in Miami, with an asset freeze and emergency measures to address the alleged real estate investment fraud amounting to $93 million. The SEC's actions extend to real estate entities such as Location Ventures, its affiliate Urbin, and 20 other associated entities linked to the alleged fraud scheme.

The SEC's complaint alleges that from approximately January 2018 until at least March 2023, Kapoor, along with certain defendant entities, sought investors through deceptive practices. These practices included making multiple misrepresentations and withholding crucial information regarding Kapoor, Location Ventures, Urbin, and their real estate developments. The misrepresentations involved Kapoor's compensation, capital contributions to Location Ventures, corporate governance, the use of investor funds, and Kapoor's background.

The investigation revealed that Kapoor purportedly misused a minimum of $4.3 million of investor funds for personal use and improperly mingled about $60 million of investor capital among Location Ventures, Urbin, and other charged entities. Moreover, Kapoor allegedly directed entities to pay inflated fees and misrepresented returns to investors by underreporting cost estimates significantly.

The complaint contends that Kapoor and other insiders allegedly misappropriated $6 million of investor funds, $4.3 million of which Kapoor reportedly diverted for personal use. He purportedly acquired a 68.7-foot yacht valued at $5 million and leased an ultra-luxury sports car.

Eric I. Bustillo, Director of the SEC's Miami Regional Office, denounced Kapoor's actions, describing him as the mastermind behind a multifaceted real estate fraud that siphoned millions from over 50 investors. The SEC filed the complaint in the U.S. District Court for the Southern District of Florida, charging Kapoor, Location Ventures, Urbin, and the 20 associated entities with violating provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

The SEC seeks long-term injunctions, financial penalties, prohibition of Kapoor from holding officer or director positions, and the retrieval of wrongfully acquired gains with interest from Kapoor and certain charged entities.

In essence, the SEC's actions against Kapoor and the associated entities underscore the gravity of alleged fraudulent practices in real estate investments. The pursuit of legal measures seeks to redress the alleged wrongdoings and restore confidence in the regulatory framework governing investment practices.

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Builder of Indian origin accused of orchestrating a $93 million fraud scheme in the U.S.

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