NJ Dance Academy Owner Accused of Preying on Students’ Families in $5.4M Fraud
thge staff of the Ridgewood blog
Parsippany, NJ, a popular South Asian dance institution is under fire after New Jersey authorities uncovered a massive, nationwide investment fraud. The New Jersey Bureau of Securities has issued an emergency order to stop Arya International and its owner, Rupal K. Patel, from continuing a scheme that allegedly defrauded dozens of families out of millions of dollars.
From “guaranteed” returns to secret debts, here is the breakdown of the investigation that has rocked the Morris County community.
The Scheme: Preying on Trust and Tradition
Based in Parsippany, NJ, the Arya International Dance Institute—also known as Mystical Stars, LLC—is a well-known organization offering South Asian dance instruction. According to Attorney General Jennifer Davenport, the institute’s owner, Rupal K. Patel, used her position of trust to target the friends and family of her own students.
The Bureau’s investigation revealed that since 2016, Patel raised $5,469,228 from 74 investors nationwide, including 48 residents in New Jersey. Many of these investors were parents who reportedly handed over their children’s college savings, believing they were contributing to a “safe” venture.
False Promises and “Guaranteed” Returns
Patel allegedly marketed unregistered securities in the form of promissory notes. To entice investors, she promised:
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High Returns: Investors were told they would receive 10% to 20% interest.
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Personal Guarantees: Patel claimed the investments were personally backed by her and the academy.
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Safety: The Bureau found these claims were “untrue statements of material fact,” as the academy was actually in deep financial trouble.
The Hidden Reality: Debt and Shuttered Studios
While Patel was soliciting new investments, the Bureau found she was hiding critical information from the community:
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Massive Debt: Arya International had borrowed nearly $2 million from merchant cash advance companies, essentially selling off the rights to their future revenue.
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COVID-19 Closures: Despite telling investors in 2022 that the academy was expanding, the school had actually been shut down for three years (2020–2023).
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Illegal Operation: The company’s corporate charter was revoked in 2021, meaning it had no legal authority to operate in New Jersey while it was still taking people’s money.
“Rupal Patel used her position as head of Arya International to shamelessly prey on and financially exploit friends and families of her students,” said Acting Director Jeremy E. Hollander.
The Legal Fallout
The Summary Cease and Desist Order demands that Patel and Arya International immediately stop selling unregistered securities. The Bureau concluded that Patel violated the New Jersey Uniform Securities Law by:
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Selling unregistered securities.
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Operating as an unregistered agent.
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Engaging in a “scheme or artifice to defraud” investors.
Protect Your Wealth: “Check Before You Invest”
This case serves as a stark reminder for the South Asian community and all New Jerseyans to verify financial professionals before handing over money—even to someone you know personally.
How to Verify an Investment in NJ:
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Toll-Free (NJ): 1-866-I-Invest (1-866-446-8378)
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Outside NJ: 973-504-3600
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Website: www.NJSecurities.gov
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