A federal jury has delivered a verdict in the case of San Diego man Denny Thakorbhai Bhakta, finding him guilty on 25 charges, including securities fraud, bank fraud, and money laundering. The decision came after an eight-day trial that painted a picture of Bhakta's involvement in a complex $35 million investment fraud scheme and a scheme to obtain COVID-relief funds fraudulently. According to the Department of Justice, the conviction is a milestone in holding Bhakta accountable for his actions that financially devastated many, including family members and close associates.
Evidence presented during the trial showed Bhakta as the orchestrator of a scheme to mislead investors through his companies, Fusion Hotel Management LLC and Fusion Hospitality Corporation. He claimed to purchase discounted hotel rooms from Hilton and sell them at a profit, a claim supported by fabricated documents. Bhakta, instead, used the investors' funds to sustain his gambling habits, paying earlier investors in a Ponzi-like fashion and covering personal expenses like luxury cars. Prosecutors reported that in a single gambling session in 2018, Bhakta managed to lose $1 million at the Wynn Las Vegas quickly.
Bhakta's fraudulent activities extended into the midst of the pandemic. In 2020, he exploited the Paycheck Protection Program to obtain $4.4 million in loans using falsified documents, including W-2s, and even appropriating the identities of his victims as employees. According to the U.S. Attorney Tara McGrath, as per the Department of Justice, "This sophisticated scheme unraveled after several victims came forward and exposed the fraud," noting that the victims "represent the best of us—hard working, honest Americans." McGrath further highlighted the jury's ruling as a testament to the triumph of justice over deceit.
The case's emotional weight was underscored by testimony from Bhakta's uncle, an immigrant who was defrauded of $4.5 million, leading him to lose everything he had built over 57 years in America. The ripple effect of Bhakta's actions was indeed wide-reaching, impacting friends, classmates, and even an elderly investor who was cheated out of $50,000. Bhakta was taken into custody following the verdict. The court has scheduled a sentencing hearing for January 25, 2025, as outlined in the DOJ report.
