Tara K. McGrath, U.S. Attorney | U.S. Attorney for the Southern District of California
Denny Thakorbhai Bhakta, a San Diego resident, was sentenced to 235 months in federal prison following his conviction for securities fraud, bank fraud, and money laundering. Bhakta's scheme defrauded investors out of $35 million and left his uncle bankrupt.
Bhakta convinced investors to fund his companies, Fusion Hotel Management LLC and Fusion Hospitality Corporation. He claimed these companies profited by selling discounted hotel rooms to United Airlines. However, Bhakta used the funds for gambling and personal expenses instead of legitimate business activities.
Victims included family members and friends. His uncle lost $4.5 million after moving to the U.S. with just $8 decades ago. Other victims were a childhood friend who lost hundreds of thousands of dollars, a former boss and spouse, a family friend who lost $1.6 million, a high school classmate and her father who together lost over $800,000, and an 88-year-old investor who lost $50,000.
Prosecutors presented evidence showing Bhakta's lavish lifestyle funded by investors' money. He gambled millions at casinos like Wynn Las Vegas where he once lost $1 million in one session.
U.S. District Judge Janis L. Sammartino stated that Bhakta's actions were deliberate and motivated by "greed and gambling," noting his lack of remorse during sentencing.
Acting U.S. Attorney Andrew Haden remarked on Bhakta's betrayal: "This defendant didn’t just betray investors—he callously swindled his own family." FBI Special Agent Stacey Moy highlighted the financial harm caused by Bhakta's fraudulent scheme.
In 2020, amid the COVID-19 pandemic, Bhakta further exploited financial relief programs by applying for PPP loans using falsified documents totaling over $4.4 million to sustain his Ponzi scheme.
Assistant U.S. Attorneys Kevin Mokhtari and Eric Olah prosecuted the case with investigation led by the FBI.
