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 and Legal References

• 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
• 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

Disclaimer

This video is for informational and educational purposes only and does not constitute legal or tax advice. Viewing this video does not create an attorney-client relationship between you and The Law Office of Jason Carr, PLLC. The discussion is based on publicly available information and is not a complete analysis of any person’s legal rights, defenses, tax obligations, or case facts. Any commentary about what a taxpayer, business owner, or advisor “should have done” is general educational discussion only and may not apply to your situation. If you have a specific legal or tax question, consult a qualified attorney or tax professional licensed in your jurisdiction.

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