Mini Madoff: Indian American Investment Adviser Found Guilty in $25 Million Ponzi Scheme
- Siddharth Jawahar, 36, of Texas, used the money from new investors to repay older ones, and to fuel an extravagant lifestyle.
A Texas-based Indian American investment adviser has been found guilty in a $25 million Ponzi scheme. Siddharth Jawahar, 36, was indicted by a grand jury in U.S. District Court in St. Louis last December on three counts of wire fraud and one count of investment adviser fraud.
According to the U.S. Attorney’s Office in Missouri, Jawahar ran an investment company called Swiftarc Capital LLC. From July 2016 through roughly December 2023, he took in more than $35 million from Swiftarc investors, “but spent about $10 million on investments in companies,” the U.S. Attorney’s office said. He used the money from new investors to repay older investors and to fuel an extravagant lifestyle that included flights on private planes, stays at luxury hotels and expensive outings at lavish restaurants.
According to the court indictment, Swiftarc had initially invested in a diverse array of securities, “but in 2015, Jawahar began investing the majority of client funds in a single investment, Philip Morris Pakistan (PMP).” Eventually, 99% of client funds were consolidated into the PMP investment, the indictment says. Jawahar did not inform investors of a dramatic decline of the value of PMP, instead falsely representing to investors that shares were trading at a much higher price, it says, and misleading investors about their profits.
The indictment accuses Jawahar of misleading someone in eastern Missouri into believing that a series of investments totaling $175,000 would go into specific companies. A New York investor was told the same about $350,000 and an Ohio investor heard the same about $250,000, the indictment says.
On June 7, 2022, the Texas State Securities Board revoked Swiftarc Capital’s authority to conduct investment activities and ordered Jawahar to “cease and desist from engaging in fraud.” The indictment says Jawahar did not notify investors about that cease-and-desist order before taking their money and continued to fraudulently solicit and receive investor funds, including $1 million from an investor weeks after the state board’s order.
He has now been ordered to remain in custody until he is presented in court. The wire fraud charges are each punishable by up to 20 years in prison and a $250,000 fine, or both. The investment adviser fraud charge is punishable by up to five years in prison and a $10,000 fine, or both.