South Florida Developer Rishi Kapoor Arrested, Charged With Fraud

Rishi Kapoor, a prominent South Florida developer connected to former Miami Mayor Francis Suarez, was arrested Friday on criminal federal fraud charges over an alleged $85 million scheme in which prosecutors accuse the developer of diverting funds, lying to financial institutions and failing to pay millions in taxes to fund his lavish lifestyle. 

The Justice Department alleges Kapoor — the former CEO of Location Ventures and its subsidiary Urbin who raised $85 million from investors — diverted funds to buy a 68-foot yacht and a residence in the wealthy Coral Gables neighborhood of Cocoplum. The Miami Herald first reported the news.

U.S. Magistrate Judge Marty Elfenbein denied Kapoor’s bond, deeming him a flight risk, during a detention hearing on Friday afternoon. Kapoor’s arraignment is scheduled for March 20.

In the 37-count indictment, the Justice Department accused Kapoor, 42, of a host of offenses, including money laundering, bank fraud, conspiracy to commit wire fraud, and tax evasion. 

Fred Schwartz of Shahady & Wurtenberger, Kapoor’s defense lawyer, denied the accusations, telling Commercial Observer that his client was legally entitled to fees from many of the transactions, including 2 percent from the $85 million raised and 3 percent to any loans that Kapoor guaranteed to compensate for possible liability.

“We will prove these things easily at trial by merely introducing the management agreements, of which the government has copies,” Schwartz said. “I can give details of our defenses on the other counts. However, I’ll wait for trial for that.”

According to prosecutors, the developer allegedly withheld $2 million in payroll taxes from Location Ventures employees, but failed to transfer the money to the Internal Revenue Service and used the funds for his personal benefit. 

Kapoor is also accused of falsifying bank statements to inflate his account balances to receive $9 million in financing. In another count, he is said to have lied about the amount that he and his family invested into Location Ventures, telling investors that they put in $13 million, when they had only contributed about half that amount, prosecutors allege. 

Kapoor allegedly deceived escrow agents to release the condo deposits for projects in Coconut Grove and Miami Beach, which weren’t completed, and used the funds for his personal benefit. To aid the developments, Kapoor had hired Suarez, then Miami’s mayor, as a consultant for Location Ventures, paying the public official $10,000 a month, the Miami Herald revealed in 2023. Suarez has not been charged.

Kapoor’s arrest comes about two years after he settled a civil case with the Securities and Exchange Commission over similar accusations. The federal agency had accused the developer of misappropriating at least $4.3 million of investor funds and improperly commingling about $60 million.

The parties settled the case later that year. Kapoor admitted liability in a consent judgment with the regulatory agency without admitting or denying its allegations. The case led a federal judge to freeze Kapoor’s assets, including his real estate projects, many of which have now been sold off.  

Julia Echikson can be reached at jechikson@commercialobserver.com.