MIAMI, Fla. (CBS12) — A Miami real estate developer was federally indicted Friday after authorities say he orchestrated a $85 million scheme to fund his luxury lifestyle.
According to a news release from the Department of Justice, 41-year-old Rishi Kapoor, formerly of Miami, failed to pay millions in taxes and lied to financial institutions to obtain funds to buy a luxury yacht.
Kapoor was CEO of Location Ventures, a Miami real estate development company that had projects in Coral Gables, Coconut Grove, Miami Beach, and Fort Lauderdale. Court documents allege that while Kapoor raised roughly $85 million from investors, many of the promised projects were never built.
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U.S. Attorney Jason A Reding Quinones for the Southern District of Florida said Kapoor not only stole from the government, but also from…
Investment fraud targets the human desire for financial growth by promising high returns with “low to no risk.”
- Ponzi Schemes: Named after Charles Ponzi, these schemes pay “returns” to earlier investors using the capital brought in by newer investors. There is no actual underlying business; the system collapses when new recruitment slows down.
- Pyramid Schemes: Similar to Ponzi schemes, but participants are usually required to sell a product or service. The primary “profit” comes from the recruitment fees of new members rather than actual product sales.
- Pump and Dump: Fraudsters spread false, positive rumors about a cheap stock (the “pump”) to drive up the price. Once the price peaks, they sell their shares (the “dump”), leaving other investors with worthless stock.