Former executive at firm that paid Suarez $170K says CEO improperly redirected loan funds

A former executive at developer Rishi Kapoor’s real estate company says in a newly filed deposition that Kapoor improperly moved millions of dollars in loans intended for a Miami condo project to a different corporate account so that he could use the money to buy out two disgruntled major investors.

Greg Brooks, the former chief financial officer at Location Ventures, said in the deposition that Kapoor obtained two private loans totaling $12 million that were supposed to be for the Coconut Grove project. Brooks said the developer — who has been thrust into the public eye because of his consulting relationship with Miami Mayor Francis Suarez — instead diverted the loans to help him purchase the equity interests of a New York couple who had invested in his company.

The loan debt, however, remained on the Grove project’s books — though that entity never received the funds, Brooks said.

“It was an improper use of funds,” Brooks said in the deposition, taken last month as part of a lawsuit brought by a group of minority investors in the $70 million Grove project, adding in his sworn testimony that he didn’t know if Kapoor “was intending to defraud the Coconut Grove investors.”

Brooks, who worked as Location Ventures CFO from his hiring in August 2022 to his firing in March 2023, testified under oath that he was contacted by the Securities and Exchange Commission, Internal Revenue Service and FBI for their civil and criminal investigations into Kapoor and his development dealings — including his hiring of Suarez, the mayor, as a $10,000-a-month consultant.

Last month, Kapoor was forced to step down as Location Ventures’ CEO as the company’s board of directors installed an interim leader, a former Miami-Dade circuit court judge, to assess its assets and liabilities while considering liquidations. Meanwhile, several lawsuits have been filed by lenders, investors and others seeking millions of dollars in damages, further complicating the future of the once high-flying real-estate company based in Coral Gables.

Brooks, a CPA who had previously worked as a financial officer on Wall Street, drew attention to Kapoor and Location Ventures in May when he sued the company for back pay and other compensation. The lawsuit resulted in a $150,000 settlement agreement that has not been paid, according to court records. In the suit, Brooks not only accused Kapoor of financial improprieties as the firm’s CEO, but he also revealed that Location Ventures was paying Suarez periodic consulting fees for “unknown services.”

The Miami Herald later reported that Suarez’s mayoral staff helped Kapoor cut through red tape at City Hall to obtain permits for Location Ventures’ URBIN mixed-used condo project in Coconut Grove at the same that the firm was paying the mayor at least $170,000 in monthly increments. The payments, which began no later than September 2021, extended at least through March 2023, according to the company’s financial statements and other records examined by the Herald.

Suarez, who is serving his second term as mayor and running for the Republican nomination for president, told the Herald he was hired to find investors for URBIN’s projects in Coconut Grove, Coral Gables and Miami Beach but stated he did not use his position as mayor to help Kapoor obtain permits at City Hall. URBIN’S condo-office project at Commodore Plaza in the Grove broke ground in January but has stalled due to Location Ventures’ financial problems.

During Brooks’ July 17 deposition, Brooks was asked repeatedly about Kapoor’s financial and development dealings at the helm of Location Ventures but not about the CEO’s business relationship with Suarez.

Kapoor and Location Ventures’ lawyers, Brian Goodkind and Kenneth Florio, could not be reached for comment.

Darrin Gursky, the lawyer who questioned Brooks in the deposition and represents a few Coconut Grove project investors, said he plans to ask a judge to appoint a receiver in an effort to pursue “clawbacks” of money that were wrongfully transferred by Kapoor to other Location Ventures’ investors and lenders.

According to Brooks’ deposition, Kapoor arranged for two major private lenders, Marty Halpern and Robert Gutlohn, to loan $7 million and $5 million, respectively, to the URBIN Coconut Grove project at the end of last year. But Brooks said they wired the loan funds directly to Location Capital, a subsidiary of Location Ventures, which then transferred the money to DA Capital, a company controlled by Diana Ulis and Alex Kleyner, the head of a debt relief company in New York.

“It went straight into Location Capital; it went straight out to DA Capital,” Brooks said in his deposition.

The couple, who sit on Location Ventures board of directors, had invested $45 million in the company and two of its luxury condo projects in Coral Gables and Fort Lauderdale, but they soured on Kapoor’s leadership. Kapoor agreed to buy out the couple in a deal signed in late 2022, and paid them $20 million toward their total investment. The supposed loan funds for the Grove project were diverted by Kapoor to help pay that amount, Brooks said in the deposition. The rest of the funds for the $20 million payment to the couple came from other Location Ventures projects managed by Kapoor.

But now the husband and wife have sued Kapoor to recover the remaining $25 million they say is still owed from their buyout agreement, according to court records.

Gutlohn, the lender, also filed suit to recover unpaid loans totaling about $15 million on URBIN’s condo project in Miami Beach, which was recently shut down by the city for lacking permits, and another $11 million on a Location Ventures’ luxury home renovation project in Coconut Grove.

While Brooks’ deposition shed a harsh light on Kapoor’s alleged handling of loans, it also exposed other serious allegations involving his role as CEO of Location Ventures.

Brooks said Kapoor asked the CFO to sign a release form that said the the purchasers’ deposits for condos in the Grove project would be used only for construction costs on that project. Brooks refused to sign the form because the development was still not ready to break ground. Brooks then asked Location Ventures’ lawyer, Kenneth Florio, what would happen if he did put his signature on the form.

“You will be committing a felony,” Florio told Brooks, according to his deposition.

Kapoor was so frustrated over Brooks’ reluctance to sign the form that he signed it himself.

Brooks further testified that about 80 buyers put down deposits on condo purchases in the Grove project, generating between $2 million and $3 million. He said that Kapoor attracted many of them by offering interest on down payments exceeding 20% of the unit costs. But instead of keeping those deposits in escrow, Brooks said, they were mostly liquidated — with Kapoor diverting more than $1 million to invest in Location Ventures’ high-rise condo project on Ponce de Leon in Coral Gables.

Brooks also said Kapoor improperly advanced himself fees last year from the Grove project in two increments totaling $220,000 that violated his operating agreement with its investors.

As the CFO, Brooks said he discovered other suspicious financial activities at Location Ventures, where about 40 employees worked under Kapoor until the firm’s financial troubles peaked last month.

Brooks testified in the deposition that Kapoor paid the company’s top dozen executives, including the CEO, as 1099 independent contractors, meaning they were self-employed, received gross paychecks and were responsible for their own taxes. Even more striking, Brooks noted in his lawsuit against the company that Location Ventures deducted regular employees’ taxes for Medicare and Social Security from their paychecks between 2017 and 2022, but did not remit those deductions to the IRS — potentially amounting to millions of dollars in unpaid payroll taxes, he said.

Brooks said that although Kapoor made $350,000 a year as Location Ventures’ CEO, he bought a $6 million waterfront home in the exclusive Cocoplum neighborhood of Coral Gables, a 70-foot yacht, a marina slip and a series of pricey McLaren sports cars.

In his role as the company’s CFO, Brooks said he also saw Kapoor’s personal bank accounts, dating back to September 2022. The developer regularly kept $10 million in his savings and checking accounts at Bank of America, Brooks testified. He said Kapoor would show potential lenders his impressive balance so they would be assured he could guarantee their loans to Location Ventures’ projects. Court records show cases where he did exactly that.

“In most cases, his lenders wanted to see a minimum liquidity of $10 million,” Brooks said.