Ponzi Scheme Cost Investors in Missouri, Elsewhere Millions, Indictment Says

ST. LOUIS – A former Texas-based investment adviser has been indicted in St. Louis and accused of running a Ponzi scheme that cost investors tens of millions of dollars.

Siddharth Jawahar, 36, was indicted by a grand jury in U.S. District Court in St. Louis Dec. 21, 2023, on three counts of wire fraud and one count of investment adviser fraud. 

The indictment was sealed until Monday, when the FBI arrested Jawahar in Miami, Florida. He made an initial appearance later in the day in U.S. District Court in the Southern District of Florida. The government is seeking to have Jawahar held in jail until trial.

Jawahar ran a Texas-based investment company called Swiftarc Capital LLC. From July 2016 through roughly December 2023, Jawahar took in more than $35 million from Swiftarc investors, but spent about $10 million on investments in companies, the indictment says. Jawahar 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, the indictment says.

“The losses alleged in the indictment would make this one of the largest Ponzi-schemes in the history of the Eastern District of Missouri,” said U.S. Attorney Sayler A. Fleming.

Manhattan District Attorney Alvin Bragg, Jr., said, “At the Manhattan D.A.’s Office, we are laser-focused on combatting white collar crime, just like our federal partners. Our top-notch team followed the money and developed a significant investigation uncovering allegations of fraud that spread far beyond New York. We were pleased to assist the Eastern District of Missouri on this investigation which led to a major federal indictment.”

"Some fraudsters come up with sophisticated schemes that are hard to detect," said Special Agent in Charge Jay Greenberg of the FBI St. Louis Division. “We still encourage searching the person’s name and company on the internet for any red flags and trusting your gut."

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.

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.

Charges set forth in an indictment are merely accusations and do not constitute proof of guilt.  Every defendant is presumed to be innocent unless and until proven guilty.

The FBI and the Manhattan District Attorney’s Office investigated the case. Assistant U.S. Attorney Derek Wiseman is prosecuting the case.