Spilling the tea: Rishi Kapoor’s ex-CFO drops bombshells in deposition
Greg Brooks testified that in addition to the FBI and SEC, the IRS is investigating disgraced developer’s management of Location Ventures
Not one, not two, but three federal agencies are investigating embattled developer Rishi Kapoor and Location Ventures, the firm he led for seven years until stepping down last month under a scandalous cloud.
Location Ventures’ former CFO Greg Brooks testified during a video deposition last month that the FBI, the Securities and Exchange Commission and the Internal Revenue Service contacted him to discuss Kapoor, according to a transcript filed in Miami-Dade Circuit Court on Tuesday.
His testimony under oath also included allegations that Kapoor diverted loan funds from a Coconut Grove project to pay off company partners and himself, as well as mishandled purchaser deposits on co-living condo units.
Brooks did not say, and he was not asked, whether he’s actually met with federal agents. Kapoor could not be immediately reached for comment.
In May, two months after he was terminated from Coral Gables-based Location Ventures, Brooks sued his former employer for allegedly not paying him bonuses he was entitled to. Brooks was hired in August of last year and was terminated near the end of March. He is currently seeking a court order to force Location ventures to pay him an agreed upon settlement of $150,000.
In his complaint, Brooks made a startling allegation that a Location Ventures subsidiary paid Miami Mayor Francis Suarez $10,000 a month for a previously undisclosed consulting job. In a response to Brooks’ lawsuit, Location Ventures confirmed the business arrangement with Suarez, who is running for the 2024 Republican presidential nomination.
The ensuing scandal, along with an avalanche of lawsuits by vendors and investors, forced Kapoor to resign as Location Ventures’ CEO, and the firm’s remaining partners implemented a plan to liquidate the company’s assets to pay off debtors.
On July 17, under oath, Brooks answered questions from Darrin Gursky, the attorney representing a group of investors who have a pending lawsuit against a Location Ventures entity developing a co-living and co-working project in Miami’s Coconut Grove neighborhood. Brooks was also cross-examined by Location Ventures’ lawyer Ken Florio.
Brooks dropped several bombshell accusations against Kapoor. For instance, Brooks alleged that Kapoor increased the debt on a $16 million loan secured by the Coconut Grove project by $12 million. Instead of placing the additional funds into the project’s bank account, the money was allegedly diverted to another, separate Location Ventures entity’s account, Brooks testified.
About $10 million was then wired to an entity controlled by Diana Ulis and Alex Klyner, a married couple who invested $45 million into Location Ventures and three of its real estate projects, Brooks alleged. Last month, Ulis and Klyner sued Kapoor and another Location Ventures affiliate alleging he only repaid them $20 million, and still owes them $25 million under an agreement to purchase back their equity.
“I also suggested that this was not the right way to account for these funds, that they should go to Coconut Grove first,” Brooks testified. “But I was told this is how it’s gonna be.”
When Gursky asked Brooks who told him that, the ex-CFO responded, “Rishi.”
Kapoor also allegedly tried to get him to falsely sign forms releasing $1.5 million in purchaser deposits from escrow accounts earmarked for construction costs when no development had taken place, Brooks testified. Signing the fraudulent documents constituted a felony, Brooks recalled telling Kapoor.
“He said, ‘Give me the form, I’ll sign it. I know what I’m doing. I know this is allowable,’” Brooks testified.
Brooks also alleged that on two separate occasions last year, Kapoor directed Location Ventures’ controller to advance him a combined $220,000 as compensation from the same loan secured by the Coconut Grove project. Kapoor allegedly dismissed Brooks’ concerns about the payments, and claimed that he was entitled to the funds as part of his compensation package.
Brooks testified that Kapoor allegedly fired him after accusing him of conspiring with one of the company’s investors to take over Location Ventures; purposely not making a deposit payment on a real estate project as a way to hurt the firm; and inappropriately trying to get his name on some of the company bank accounts.