Miami developer Rishi Kapoor raised about $89 million, bought a 68-foot yacht, and left $1.3 million in employee payroll taxes unpaid. I walk through the emails, the false QuickBooks entries, and how a payroll tax balance led to a 136-month sentence.
Show Notes:
Rishi Kapoor was CEO of Location Ventures, a Miami developer that raised about $89 million for projects that mostly were never built. Court records describe a yacht, a 2.8-carat diamond ring, and a $5.9 million Cocoplum home bought with misused investor funds.
On the tax side, Location Ventures withheld about $1.3 million in payroll taxes and never paid them over, while Kapoor paid himself more than $2 million. His finance staff raised the issue in writing in 2019 and 2021. He admitted that false QuickBooks entries showed the taxes as paid and that investors received financial statements saying the same.
He pleaded guilty to money laundering and a payroll tax conspiracy and received 136 months. Restitution remains open. I explain trust fund taxes, Slodov v. United States, the Trust Fund Recovery Penalty, and what a business owner should do the day payroll deposits fall behind.
Key Takeaways
- Withheld payroll taxes are held in trust for the United States. They are not working capital.
- Falling behind on deposits is civil. False books and false statements about the taxes create criminal exposure.
- Internal emails, prior IRS notices, and distributions to owners are how willfulness gets proven.
- Make current deposits first, designate voluntary payments to the trust fund portion, and stop owner distributions.
- Bring in a tax attorney before internal discussions about what to pay and what to defer, so those communications can be privileged.
Resources Mentioned
DOJ sentencing announcement: https://www.justice.gov/usao-sdfl/pr/miami-real-estate-developer-sentenced-89-million-investor-fraud-and-tax-scheme
IRS-CI sentencing announcement: https://www.irs.gov/compliance/criminal-investigation/miami-real-estate-developer-sentenced-for-89-million-investor-fraud-and-tax-scheme
DOJ indictment announcement: https://www.justice.gov/usao-sdfl/pr/miami-developer-charged-85-million-fraud-scheme-used-fund-luxury-yacht-and-lifestyle
United States v. Kapoor, No. 26-cr-20073 (S.D. Fla.)
SEC v. Kapoor, No. 1:23-cv-24903 (S.D. Fla.): https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25921
Slodov v. United States, 436 U.S. 238 (1978): https://www.law.cornell.edu/supremecourt/text/436/238
26 U.S.C. § 7501 (withheld taxes held in trust)
26 U.S.C. § 6672 (Trust Fund Recovery Penalty)
26 U.S.C. § 7202 (willful failure to collect or pay over tax)
18 U.S.C. § 371 (conspiracy to defraud the United States)
DOJ Criminal Tax Manual, Chapter 9 (§ 7202): https://www.justice.gov/sites/default/files/tax/legacy/2006/02/28/09ctax.pdf
Investigative reporting on the indictment: https://www.miaminewtimes.com/news/a-yacht-a-rolex-and-a-single-digit-inside-rishi-kapoors-alleged-fraud-40559116
The Law Office of Jason Carr, PLLC: https://carrtaxlaw.com