New Jersey resident Niket Shah accused of cheating investors of $250,000

He also forged documents to show the investors that the funds were performing well

An Indian American has been charged with stealing money worth $250,000 from his friends and co-workers in a Ponzi scheme. The Securities and Exchange Commission (SEC) has ordered a preliminary injunction and asset freeze against Niket Shah, a New Jersey resident who ran the scheme.

According to the SEC’s complaint, unsealed on March 22, 2018, in federal court in Brooklyn, New York, Shah cheated the investors by marketing two funds in the name of Spark Trading Group, LLC. More than 15 investors contributed hundreds of thousands of dollars to the fund expecting high returns, said a statement issued by the SEC.

He also forged documents to show the investors that the funds were performing well while they were actually losing money.

“Shah obtained investments for the funds by lying about his success as a trader, Spark Trading’s returns, and how he intended to use investors’ money, including altering financial statements to make the funds appear profitable when they were actually losing money,” said the statement.

The investors never received monthly returns as promised by Shah. Though he had guaranteed them against losses, the investors lost their money.

The complaint alleged that Shah misused investor money for his own benefit and suffered substantial losses on the amounts actually invested. When investors sought their money back, he lied and said the money had been frozen by government agencies, including the Commission.

“Fraudsters who swindle their friends and colleagues using doctored financial statements and outright lies should expect the Commission and its staff to act swiftly and decisively, as we have here today,” said Melissa Hodgman, Associate Director of the SEC’s Enforcement Division, in a statement.

The SEC’s complaint charges Spark Trading and Shah with violations of the antifraud provisions of the federal securities laws. The SEC is seeking the return of allegedly ill-gotten gains with interest and civil money penalties.

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