Denny Thakorbhai Bhakta, a San Diego resident, has been sentenced to 235 months in federal custody following his conviction on charges of securities fraud, bank fraud, and money laundering. The conviction stems from a $35 million scheme that led to the financial ruin of several investors, including Bhakta's elderly uncle.
The court found that between 2016 and 2021, Bhakta misled investors by claiming his companies, Fusion Hotel Management LLC and Fusion Hospitality Corporation, were purchasing discounted hotel room blocks from Hilton to sell at a profit to United Airlines. However, these claims were supported by fabricated documents such as fake contracts and falsified bank statements. Instead of investing the funds as promised, Bhakta used the money for personal expenses like gambling and luxury vehicles.
Among those defrauded was Bhakta’s uncle who lost $4.5 million. He testified during the trial about losing everything he had worked for over 57 years in America due to Bhakta's actions. Other victims included close friends and family members who collectively lost millions.
Evidence presented during the trial revealed that Bhakta frequently gambled away investor funds at casinos. In one instance in 2018, he lost $1 million in just a few hours at Wynn Las Vegas.
U.S. District Judge Janis L. Sammartino described Bhakta’s actions as deliberate and calculated during sentencing. "I haven’t seen a case quite like this," she stated while highlighting his lack of remorse.
Acting U.S. Attorney Andrew Haden commented on the betrayal felt by those close to Bhakta: “This defendant didn’t just betray investors—he callously swindled his own family and closest friends.” FBI Special Agent Stacey Moy added that justice had been served for those exploited by Bhakta’s greed.
In addition to the investment fraud scheme, court documents revealed that in 2020, Bhakta also engaged in COVID-relief fraud through the Paycheck Protection Program (PPP). He applied for multiple PPP loans using false documentation amounting to over $4 million which he then used to continue his fraudulent activities.
Assistant U.S. Attorneys Kevin Mokhtari and Eric Olah prosecuted the case with assistance from the Federal Bureau of Investigation.