Disgraced developer Rishi Kapoor will stay behind bars in downtown Miami’s federal detention facility after a judge denied his request to be released on bond.
At a Thursday afternoon hearing, U.S. District Judge K. Michael Moore declined to hear arguments from Kapoor’s legal team to reconsider a ruling last month by a magistrate judge to keep their client locked up following his March 6 arrest on 37 felony counts including wire and bank fraud, money laundering, failure to account for and remit payroll taxes to the Internal Revenue Service and tax evasion.
Kapoor appeared in court in khaki prison scrubs with his hands shackled to a chain around his waist.
Moore gave Kapoor’s lawyers two weeks to meet with him while he is in custody to go over the discovery evidence against him, which consists of tens of thousands of documents, including bank and financial records and witness statements. If they can show they are unable to efficiently go over the evidence while Kapoor is in custody, the judge said he would reconsider releasing him on bond and delaying his trial.
“Judge Moore wanted time to fully consider the amount of discovery involved before making a decision as to the bond release,” Fred Schwartz, one of Kapoor’s lawyers, told The Real Deal after the hearing. “He wants us to demonstrate how difficult it would be to prepare for trial with Rishi in jail.”
According to an April 6 motion, Kapoor’s father and two siblings are willing to put up their three homes in Atlanta, worth a combined $2.7 million, as collateral for a bond. Kapoor and his wife, Jenni Frank Kapoor, would reside in Atlanta while awaiting trial. However, prosecutors rejected that offer, saying the amount is not enough to deter Kapoor from fleeing the country. He allegedly has access to a yacht that could ferry him to the Bahamas, and he could use his father’s wealth to finance his escape, prosecutors argued.
A grand jury indicted Kapoor in March in the culmination of a three-year FBI and IRS probe into his business dealings as the founder and CEO of Location Ventures, a defunct Coral Gables-based development firm that imploded just as it was gaining traction as one of South Florida’s rising real estate enterprises.
The indictment alleges Kapoor raised approximately $85 million from investors, yet most of the promised real estate projects were never built. Despite being entitled to a capped salary of $400,000 plus certain fees, Kapoor diverted substantially more funds for personal use, including the purchase of a 68-foot yacht and a residence in Coral Gables luxury enclave Cocoplum, federal authorities allege.
The feds also accuse Kapoor of misrepresenting to investors the amount of his personal financial contribution to Location Ventures, claiming he had invested $13 million alongside his business partner and family. In reality, he allegedly contributed roughly half that amount. Kapoor also allegedly deceived escrow agents to secure the release of pre-construction condominium deposits and then misappropriated those funds for personal expenses unrelated to the developments.
As a result, projects in Coconut Grove and Miami Beach were never built, while Kapoor allegedly diverted more than $2 million from company accounts for his personal benefit, according to prosecutors, the IRS and the FBI.
In addition, Kapoor is charged with withholding payroll taxes from Location Ventures employees but failing to remit those taxes to the IRS, as well as failing to pay his own personal taxes from 2019 through 2023, despite earning more than $2.8 million in income in 2022 and 2023 alone.
The indictment further alleges that Kapoor obtained more than $9 million in bank financing by falsifying bank statements to inflate his account balances, failing to disclose a significant mortgage on his Cocoplum residence, and misrepresenting that his tax returns had been filed with the IRS.
Kapoor’s real estate career began unraveling in May of 2023 when Greg Brooks, a former Location Ventures CFO, sued the company and Kapoor for failing to pay him $80,000 in bonuses. Brooks’ lawsuit alleged that Kapoor committed “financial improprieties” including paying a $10,000 a month consulting fee to then-Miami Mayor Francis Suarez without an explanation or a written contract of what the mayor’s services entailed.
Brooks and Location Ventures reached a private settlement, but Kapoor, his firm and his affiliates were hit with a wave of lawsuits from investors, lenders and vendors that crippled the firm. Kapoor stepped down as CEO, but Location Ventures was unable to survive. In late 2023, the U.S. Securities and Exchange Commission sued Kapoor, Location Ventures and its affiliates in Miami federal court for allegedly misappropriating $95 million in investor funds.
In November 2024, Kapoor reached a settlement with the SEC without admitting or denying any wrongdoing. Meanwhile, for the past two years, a court-appointed receiver has been attempting to sell unfinished development sites owned by Location Ventures and its affiliates to pay back creditors.