SEC, FBI investigating Kapoor, Herald reports

Florida developer Rishi Kapoor is reportedly under investigation by the Securities and Exchange Commission and the FBI, the Miami Herald is reporting.

The investigations come from real estate and business deals in Florida through his company, Location Ventures, according to the newspaper.

Locally, Kapoor and Location Ventures are seeking a zone change on 12 acres of land between the Flathead River and Columbia Heights that borders U.S. 2.

The county Planning Board was expected to take up that application at its June 14, meeting. The application, for the time being, is just for a zone change. It doesn’t detail any subdivision proposals.

According to the Miami Herald story, Location Ventures allegedly paid Miami Mayor Francis Suarez $10,000 a month as a consultant. He earned about $30,000 total.

The Herald got the information from internal Location Ventures documents obtained by the newspaper.

The company was allegedly seeking zoning and other permit modifications so it could build a multi-faceted development in that city’s Coconut Grove neighborhood.

Special agents with the FBI’s public corruption squad began questioning witnesses this week, the Herald reported.

The Securities and Exchange Commission has also confirmed that it is looking into Location Ventures in a response denying the Herald access to public records, according to the newspaper. Sources told the Herald its investigators are digging into whether Kapoor and his company were selling investment contracts without registering them as securities, misrepresenting potential profits to investors or misappropriating funds for personal expenses.

Kapoor has used his funds to try to sway public opinion locally as well. Earlier this year Location Ventures funded a housing study by University of Montana economist Patrick Barkey, retaining the right to edit the document. The Barkey study largely claimed there was a housing shortage locally, but didn’t look at the effects of investment housing, vacation rentals and second homes, all of which play a role in the Flathead Valley's housing crunch.

He also produced a controversial video about housing hosted by local bankers, one local businessperson and Location Ventures employees or real estate agents, touting the need for apartments.

Location Ventures at the time was proposing building an 180-unit apartment and townhome complex on 22 acres of land just east of the city. The all-rental complex would rent for about $2 a square foot, Kapoor told city leaders. But a $2 a square foot rental is more than $2,000 a month — far higher than most people in the city could afford, even if they wanted to rent a unit.

The development failed to gain approval by City Council on a 5-2 vote. Council cited traffic concerns and the fragile nature of the property, as it is 500 feet from the Bad Rock Wildlife Management Area and about half the acreage is wetlands.

Location Ventures claimed it was “collaborating” with Montana Fish, Wildlife and Parks and the Flathead Land Trust on mitigating the impacts to wildlife, but both the state wildlife agency and the Land Trust denied those claims.