In what seems to be a dismal portrayal of trust betrayed, San Diego's Denny Thakorbhai Bhakta has been sentenced to nearly two decades behind bars for a monumental $35 million fraud scheme that targeted investors and exploited COVID-relief funds, with his elderly uncle among the victims left financially devastated. After being convicted on all 25 charges related to securities fraud, bank fraud, and money laundering, the 42-year-old former businessman will spend 235 months in custody, as reported by the U.S. Attorney's Office Southern District of California.
Bhakta's companies, Fusion Hotel Management LLC and Fusion Hospitality Corporation were the fronts he utilized to lure investors with falsehoods about purchasing hotel rooms at a discount and reselling them at higher prices for large profits. He falsified documents to lend credibility to his claims. He even concocted bank statements and contracts to make it appear that his ventures were thriving financial successes. Instead of legitimate business dealings, he used investor funds to fuel a lavish lifestyle that included gambling sprees and luxury cars—the high-rolling gambler once dropped $1 million at a Las Vegas casino in less than 8 hours, according to records disclosed during the trial.
A list of Bhakta's victims reads like a heartrending ledger of misplaced faith. His uncle, who had painstakingly built his life from humble beginnings as an immigrant, was swindled out of his life savings of $4.5 million. Others like his childhood friend, former boss, and even an elderly investor also suffered severe financial blows, with combined losses running into the millions. "This defendant didn’t just betray investors—he callously swindled his own family and closest friends, leaving his elderly uncle bankrupt," said Acting U.S. Attorney Andrew Haden in a statement.
In the face of the global COVID-19 pandemic, Bhakta further exploited the Paycheck Protection Program (PPP) by fraudulently securing 18 separate PPP loans totaling over $4 million. He created sham tax documents and posed his victim investors as employees to qualify for these relief funds. These ill-gotten gains were then plowed back into the Ponzi scheme, along with sustaining his notorious gambling habits. U.S. District Judge Janis L. Sammartino, denouncing Bhakta's "deliberate [and] calculated" actions, handed down the 235-month sentence, noting that he displayed "nothing resembling remorse," according to the U.S. Attorney's Office Southern District of California.
The Federal Bureau of Investigation led the inquiry into Bhakta's complex fraud, with the FBI Special Agent in Charge Stacey Moy. At the same time, Assistant U.S. Attorneys Kevin Mokhtari and Eric Olah prosecuted the case.
