New Jersey Attorney General Jennifer Davenport announced that the New Jersey Bureau of Securities has taken emergency action to stop what officials describe as the unlawful sale of unregistered securities tied to Arya International, a South Asian dance academy based in Morris County.

According to the Bureau, a Summary Cease and Desist Order has been issued against Mystical Stars, LLC, formerly known as Arya International Inc., and its owner, Rupal K. Patel. The order directs the company and Patel to immediately cease offering or selling unregistered securities and to stop making alleged misrepresentations to investors.

In a statement, the Bureau said its investigation found that Patel and Arya International solicited investments primarily from friends and family members of the academy’s students across the United States. Authorities allege that $5,469,228 was raised from 74 investors, including 48 New Jersey residents, through the sale of unregistered securities.

“As part of our commitment to tackling the affordability crisis, our office will hold financial predators accountable whenever they cheat New Jerseyans out of their hard-earned money,” Attorney General Davenport said. She added that fraudulent investment schemes can cause significant financial harm by exploiting trust and diverting funds from investors. “My office will continue to take action to halt fraudulent conduct and ensure compliance with the laws that protect our investors from financial predators,” she said.

The Bureau stated that Patel is the owner, chief executive officer, director, and sole shareholder of Arya International, which describes itself as a charitable dance and entertainment organization offering South Asian dance instruction throughout the United States. Investigators allege that beginning in March 2016, Patel and Arya International sold promissory notes, referred to by regulators as “Unregistered Arya Securities,” without registering them as required under state law.

Officials said Patel, who is not registered to sell securities in New Jersey, marketed the investments as safe opportunities offering returns of 10 to 20 percent, allegedly backed by personal guarantees from both Patel and Arya International. According to the Bureau, some investors were persuaded to invest funds intended for their children’s college education.

“Rupal Patel used her position as head of Arya International to shamelessly prey on and financially exploit friends and families of her students,” said Jeremy E. Hollander, Acting Director of the Division of Consumer Affairs. He stated that the Cease and Desist Order requires the parties to immediately stop the alleged unlawful conduct and comply with the state’s Uniform Securities Law.

Acting Bureau Chief Keith A. Alt said the enforcement action is intended not only to halt further sales of the securities in New Jersey but also to reinforce the importance of due diligence. “By operating outside the regulatory framework of the securities industry, Patel and Arya International misled investors and withheld critical information that investors needed, and were legally entitled to receive, in order to make informed investment decisions,” Alt said.

The Bureau alleges that Patel and Arya International made untrue statements of material fact in connection with the sale of the promissory notes. Among the claims cited by regulators was an assurance that new investors would receive full repayment of principal plus interest at maturity, even though, according to the Bureau, the company was unable to repay earlier investors.

The statement further alleges that Arya International borrowed at least $1,960,452 between 2020 and 2023 through factoring agreements with merchant cash advance companies, assigning rights to future accounts receivable in exchange for funding. Regulators contend that these financial arrangements contributed to the company’s inability to meet its obligations to investors.

Authorities also allege that a 2022 solicitation email described the academy as having expanded after the COVID-19 pandemic, while in reality, the dance academy had been shut down for approximately three years between 2020 and 2023. In addition, the Bureau claims that representations about personal guarantees were made during a period when the company had exhausted its funds and was not generating new revenue from classes.

The Bureau of Securities is responsible for regulating the securities industry in New Jersey and protecting investors from fraud. In its statement, the agency urged residents to “Check Before You Invest” and to verify the registration status of both investments and those offering them before committing funds. 

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