Texas Investment Adviser Gets 11 Years for $35 Million Ponzi Scheme

AUSTIN, Texas - The operator of a Texas-based investment company has been sentenced to 11 years in federal prison and ordered to pay more than $31 million in restitution for a years-long Ponzi scheme that prosecutors said used investors' money to fund private jet travel, luxury apartments and other personal expenses.

Siddharth Jawahar, originally from India, pleaded guilty in January to three counts of wire fraud. A federal judge in St. Louis sentenced him last week to 11 years in prison and ordered him to pay $31.35 million in restitution.

Jawahar operated Swiftarc Capital LLC, a Texas-based investment advisory company.

According to federal prosecutors, Jawahar began investing client funds in Philip Morris Pakistan in 2015. The investment eventually accounted for about 99% of client funds.

As the value of the investment declined, prosecutors said Jawahar concealed the losses and continued telling investors they were making money. Other clients were told their money would be invested in particular companies, but those investments were never made.

Between July 2016 and December 2023, Jawahar collected more than $35 million from Swiftarc investors while investing only about $10 million, according to prosecutors.

Instead, authorities said he used money from newer investors to pay earlier investors while spending investor funds on an expensive lifestyle that included private jets, luxury hotels, apartments in Austin and New York City, private club memberships, clothing purchases and high-end restaurants.

The Texas State Securities Board had already taken action against Jawahar years before the federal case resulted in his conviction.

In 2022, the Texas Securities Commissioner revoked Swiftarc Capital's registration as an investment adviser after state regulators found Jawahar was substantially overstating the value of the fund's investment in Philip Morris Pakistan.

According to the state, Jawahar instructed the fund administrator to value the stock at 4,000 Pakistani rupees per share on reports sent to investors rather than using the price reflected on brokerage statements.

Philip Morris Pakistan's trading price had fallen from 3,230 rupees per share in September 2019 to 1,760 rupees in May 2020. By the time Texas regulators issued their order, the stock was trading at 541 rupees per share.

The inflated valuation created problems when investors sought to withdraw their money. Regulators said the fund could not sell the shares at the reported 4,000-rupee valuation and faced nearly $5 million in outstanding redemption requests.

Investigators said Jawahar responded by bringing in money from new investors and using those funds to satisfy redemption requests from existing investors, creating what state regulators described as Ponzi-like payments.

The Texas State Securities Board referred its findings to federal authorities after its investigation. State regulators said NFL player Travis Kelce was identified as one of the investors, which contributed to the referral of information to federal authorities in Missouri.

Jawahar also controlled numerous other entities that authorities said were used during the scheme, including Swiftarc Fund LP, Swiftarc Holdings, Swiftarc Growth Fund LP, Swiftarc Opportunities Fund LP, Swiftarc Ventures LLC and Swiftarc Beauty Fund LP.

Federal prosecutors said Jawahar attempted to obstruct the investigation after he was indicted. He tried to persuade a victim to provide a favorable statement to the FBI, lied about his immigration status and finances and attempted to have his sister remotely wipe his iPhone to conceal evidence, according to the government.

The FBI and Manhattan District Attorney's Office investigated the federal case. Assistant U.S. Attorney Derek Wiseman prosecuted it.