NJ couple charged with alleged $2 million Ponzi scheme

(WPHL)– A Middlesex County couple is being charged with fraud after they allegedly stole more than $2 million from investors in a Ponzi scheme.

According to the NJ Attorney General, a state grand jury indicted 50-year-old Swapnil Rege with counts of second-degree securities fraud, second-degree investment adviser fraud, second-degree theft by deception, second-degree theft by failure to make required disposition of property received, first-degree money laundering, second-degree theft by unlawful taking, and second-degree passing a bad check in connection with the alleged fraud scheme.

His wife, 48-year-old Reema Rege, was charged with second-degree securities fraud, second-degree investment adviser fraud, second-degree theft by deception, and second-degree receiving stolen property.

From January 2020 through August 2022, Swapnil Rege is alleged to have “misled two investors with investment agreements and promissory notes that guaranteed them the return of their principal investment plus large, annualized returns of 21 to 80 percent generated from purportedly profitable securities trading activity through his investment company, Swapstar Capital LLC”, said the AG’s office.

The AG’s office says Rege allegedly failed to disclose important information to investors, such as the fact that he had been barred by the U.S. Securities and Exchange Commission since July 2019.

Rege had allegedly misled two investors into collectively investing approximately $2.28 million.

He also used his investment-adviser relationship to allegedly take stocks valued at $119,371 from the investor’s personal trading account and allegedly steal another $100,000 from the investor’s individual retirement account. He then gave the investor $100,000 in a bad check, the AG’s office said.

Rege also allegedly used money from investors to pay fake investment returns.

The AG’s Office alleges that Rege also used the money for his own benefit by purchasing a mansion for his family, paying personal credit card debts, and paying other family and personal expenses.

Rege allegedly laundered more than $1.4 million in stolen funds through various financial transactions to provide the fake returns to investors using their own money. The AG’s office said he also allegedly laundered more than $500,000 of the fraud proceeds using numerous bank accounts and securities trading accounts to conceal or disguise the nature, location, source, ownership, or control of the funds.

Reema Rege, Swapanil’s wife, had allegedly knowingly participated in the investment fraud scheme. She is being charged with a separate count of “allegedly receiving more than $75,000 in securities and money, knowing or believing the money had probably been stolen from investors,” said the AG’s office.

“Investment fraud schemes prey on vulnerable victims with empty promises of huge profits and guaranteed returns,” said Attorney General Matthew J. Platkin. “The defendants charged in this case allegedly used investors’ funds in a classic Ponzi scheme, enriching themselves along the way. The charges in the indictment serve as a reminder to those who would take advantage of New Jersey investors that we will hold you accountable.”

“If it sounds too good to be true, it probably is. Unscrupulous investment advisers are always coming up with new ways to lure their unsuspecting victims into handing over their money,” said DCJ Director Theresa L. Hilton. “We will always be on the lookout for such illegal activity.”  

“The defendants allegedly took advantage of investors by duping them out of millions of dollars and using the money for their personal benefit, while continuing a Ponzi scheme that paid investors fake returns with their own money,” said Legal Chief Pablo Quiñones of the Office of Securities Fraud and Financial Crimes Prosecutions (OSFFCP). “White-collar frauds, such as those alleged in this case, are a top priority of our office, and we will continue to ensure that those who engage in such conduct are brought to justice.”

The investigation remains ongoing. Anyone with information is asked to contact the DCJ’s tip line at (800) 277-2427 or use the OSFFCP’s complaint email at OSFFCP@njdcj.org.