ST. LOUIS — The investment advisor who allegedly orchestrated what prosecutors are calling one of the largest ponzi schemes in Missouri's history, was recently indicted by a grand jury in the U.S. District Court in St. Louis.
Siddharth Jawahar, who operated the Texas-based Swiftarc Capital investment company, was indicted on three counts of wire fraud and one count of investment adviser fraud, according to a release from the U.S. Attorney's Office, Eastern District of Missouri. He was arrested by the FBI in Miami, where he currently remains in custody.
According to the U.S. Attorney's Office, Jawahar ran Swiftarc from July 2016 through December 2023 and is accused of taking more than $35 million from the company's investors. The U.S. Attorney's Office claims Jawahar spent $10 million on investments in companies and used the money from new investors to pay back older investors. In addition, Jawahar is accused of using investor funds to support an "extravagant lifestyle" including private planes, luxury hotels and lavish restaurants.
An investor in Eastern Missouri, was told by Jawahar that a series of $175,000 in investments would go into specific companies and an investor in New York was told the same misleading information about $350,000 regarding investments. Another investor in Ohio was misled regarding $250,000, according to the U.S. Attorney's Office.
"The losses alleged in the indictment would make this one of the largest Ponzi schemes in the history of the Eastern District of Missouri," U.S. Attorney Sayler A. Fleming said in a statement.
The investigation into Jawahar, which involved the FBI, St. Louis Divison, the Manhattan District Attorney's Office as well as the Missouri Eastern District's U.S. Attorney's Office, revealed he began investing the majority of client funds in Philip Morris Pakistan (PMP) in 2015. After 99% of his client's funds were put into PMP, Jawahar failed to inform investors of the company's decline in value, according to the U.S. Attorney's Office. Jawahar allegedly then falsely told investors that shares were trading at a higher price.
“As the Indictment makes clear, defendant Sid Jawahar stole from victims across the country, including folks who live right here in St. Louis," Assistant U.S. Attorney Derek Wiseman who is prosecuting the case told the St. Louis Record.
"The United States Attorney’s Office is dedicated to holding fraudsters like Defendant Jawahar accountable and vindicating the rights of victims in this district and across the country," Wiseman added.
According to the U.S. District Attorney's Office, in June of 2022, the Texas State Securities Board revoked Swiftarc Capital's ability for investment activities and issued a cease and desist order. However, Jawahar failed to notify investors and continued to solicit and take money from investors.
Just weeks after the Texas State Securities Board's action, Jawahar is alleged to have taken $1 million from an investor, according to the U.S. District Attorney's Office.
"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 in the release. “We still encourage searching the person’s name and company on the internet for any red flags and trusting your gut."
The FBI and the Manhattan District Attorney's Office investigated the case and Jawahar could face up to 20 years in prison and a $250,000 fine or both for the fraud charges. For the investor fraud charge, he could face up to five years and a $10,000 fine or both, according to the U.S. Attorney's Office.