Denny Thakorbha Bhakta owned the companies called Fusion Hotel Management and Fusion Hospitality Corporation, collectively known as “Fusion.” The act of combining different elements into a unified whole is not just limited to sciences, arts, or even cooking. For Bhakta, Fusion was the binding of two schemes to steal from his family and the U.S. taxpayer.
Between 2016 and 2021, Bhakta falsely told investors that Fusion routinely acquired discounted blocks of hotel rooms from Hilton, which Fusion then sold to United Airlines and other companies at a higher price for significant profits. To support these lies, Bhakta provided fabricated bank statements, fake contracts, and profit and loss statements purporting to show millions in revenue and profit. However, instead of buying blocks of hotel rooms with investors’ funds, Bhakta used those funds to pay earlier investors of Fusion in a Ponzi-like fashion – along with using the funds to sustain his gambling habits and covering personal expenses like luxury cars.
And then the pandemic came, and Bhakta doubled down on the fraud opportunity. Using the very companies that he used in the ongoing securities fraud, Bhakta also fraudulently applied for and received eighteen Paycheck Protection Program loans totaling $4.4 million. To support the fraudulent PPP loans, and unbeknownst to his victim/investors, Bhakta created fake W-2 and other IRS documents that claimed them as employees of Fusion. Bhakta used the more than $4.4 million he received in PPP loans in the same manner that he used his fraudulently obtained proceeds in his securities scheme, to keep the Ponzi scheme going and to continue gambling and losing money at casinos.
On November 2, 2024, Bhakta was found guilty. A sentencing hearing is set for January 25, 2025.
Excellent job by the COVID-19 Fraud Enforcement Task Force in this case.
Today’s Fraud of The Day is based on article “San Diego man convicted of COVID-relief fraud scheme” published by Imperial Valley Press on November 2, 2024.
After an eight-day trial, a federal jury has convicted Denny Thakorbhai Bhakta, 42, of San Diego, on all 25 counts of securities fraud, bank fraud and money laundering in connection with a $35 million dollar investment fraud scheme and COVID-relief fraud scheme, the U.S. Department of Justice said.
Bhatka’s fraud scheme targeting numerous, victims including a childhood friend who lost hundreds of thousands of dollars; a friend of his family who lost $1.6 million; a high school classmate and her father who together lost more than $800,000; a cousin who lost $40,000; and an 88-year-old investor who was defrauded out of $50,000.