In another week, there will be more investigations into South Florida developer Rishi Kapoor.
The FBI and the SEC have launched separate investigations into Kapoor, According to the Miami Herald.
The FBI’s criminal investigation focuses on $10,000 a month paid to Miami Mayor Francis Suarez by a subsidiary of Kapoor’s company, Location Ventures. The agency is investigating whether the payments amounted to bribes in exchange for a permit or other favor from the mayor for Location Ventures’ mixed-use project in Coconut Grove.
The SEC is also investigating Location Ventures, focusing on whether Kapoor and his company sold investment contracts without registering it as a security, misrepresented potential profits to investors or used the funds for personal expenses. The agency’s investigation, which began earlier this year, is examining potential violations related to securities regulations.
The federal investigation comes after the Miami Herald revealed that Location Ventures paid Mayor Suarez for consulting and disclosed internal corporate records showing the mayor and his office assisted Kapoor in overcoming permitting hurdles for his $70 million Coconut Grove development. The Miami-Dade Ethics and Public Trust Commission and the state attorney’s office have also opened investigations into the matter.
The investigation challenges Kapoor, an up-and-coming developer with multiple real estate projects in South Florida, and Mayor Suarez, who is expected to announce his bid for the Republican presidential nomination this month.
Both Kapoor and Suarez have previously denied any wrongdoing in their business relationship. Kapoor claimed the mayor helped with marketing and branding for his project, while Suarez said he was paid to attract investors to Kapoor’s venture.
The FBI, the U.S. Attorney’s Office and the Securities and Exchange Commission declined to comment on the investigation. However, legal experts have suggested that if the SEC determines that Location Ventures sold the investment contracts as securities, Kapoor and his company could face serious repercussions, including questions about the use of funds and potential personal gain.
Greg Brooks, a former senior executive who worked at Location Ventures, filed a lawsuit accusing Kapoor of financial misconduct, including unauthorized fees, misappropriation of funds and misuse of deposits from condo buyers.
The lawsuit was settled in secret last week.
Kapoor, a prominent developer known for attracting wealthy investors, has been involved in numerous real estate projects.
However, some small and medium investors have raised concerns about his behaviour, including taking out loans without consulting them and incurring additional fees.
As the investigation unfolds, the extent of the SEC’s interest in Mayor Suarez’s work for Location Ventures remains unclear.
However, the mayor said he was involved in raising money for the company. During the investigation, Suarez was also preparing for a possible presidential campaign, reaching out to donors and planning to speak at the Ronald Reagan Presidential Library.
— Ted Glazer