The feds want to hear from Miami victims of a potential $25 million Ponzi scheme
Fraud charges have been filed against Siddharth Jawahar, who was arrested in Miami in January. But now, in March, federal prosecutors want to hear from more people in Miami, Kansas City or elsewhere who might have invested in Jawahar’s company.
An indictment in St. Louis federal court accuses Jawahar, 36, of using Swiftarc Capital to run a Ponzi scheme, collecting $35 million from investors but investing only $10 million. The rest, the indictment says, went for “Ponzi scheme payments to previous investors and extravagant lifestyle expenses, including payments for flights on private planes, stays at luxury hotels, and expensive outings at lavish restaurants.”
The U.S. Department of Justice says the FBI found Jawahar-nicked investors in Miami, Kansas City, San Francisco, Los Angeles, New York, Austin and Cleveland. Last week, Justice requested anyone who invested in Swiftarc Capital or with Jawahar call the FBI’s St. Louis office at 314-589-2500.
State records show that in Miami, Jawahar also ran Swiftarc Ventures, Swiftarc Ventures of Florida and Swiftarc Holdings out of an office at 801 Brickell Ave.
Jawahar is charged with three counts of wire fraud and one count of investor fraud in St. Louis federal court. He will remain in federal custody until the finish of the case after a prosecutor’s request that referenced Jawahar crashing a BMW through the front of a restaurant in 2013, then running from the scene. He was caught, convicted on a DUI charge and fined $10,000.
Jawahar “has proven through his prior conduct that he has specific willingness to flee from law enforcement,” the detention filing states.
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Swiftarc into a Ponzi scheme?
The indictment says Jawahar and business associates started Swiftarc Capital in 2010, registered it with the state of Texas as an investment advisor and, originally, “invested in a diverse array of securities.”
But in 2015, the indictment says, Jawahar began putting most of Swiftarc’s investor money in Philip Morris Pakistan, identified as “PMP” in the indictment but named by the Texas State Securities Board. With 99% of Swiftarc’s money in PMP, Swiftarc had put all its investor’s eggs in one basket.
“After [Jawahar] placed nearly all his investors’ money into the PMP investment, the trading price for that company experienced a dramatic decline,” the indictment said. “Jawahar “did not inform Swiftarc Capital investors of PMP’s substantially decreased trading price. Instead, [Jawahar] falsely represented to Swiftarc Capital investors that PMP was trading at a much higher price than it actually was.”
When investors asked for their money and selling off PMP shares wouldn’t provide that for Jawahar, the indictment says, he looked for more OPM (Other People’s Money). That money could be used to pay off the previous investors “and fund his lifestyle.”
From July 2016 through this past December, the indictment says, is when Jawahar took in $35 million from Swiftarc investors and used only $10 million on investments.
In its 2022 announcement revoking Swiftarc Capital’s investment advisor registration, the Texas State Securities Board said by September 2019, there were only 3,500 shares of PMP being traded per month, and there was a congruent drop in price.
But Jawahar, the Texas Board said, ordered Swiftarc’s fund administrator to say PMP was still valued at 4,000 Pakistani rupees and stayed on that claim as PMP value plummeted. Texas said brokerage statements showed PMP fell from 3,230 rupees per share in September 2019 to 1,760 in May 2020 and was at 541 on May 25, 2022.
