The former CEO of a healthcare services company has admitted to participating in an investment fraud scheme. U.S. Attorney Alina Habba announced that Parmjit Parmar, also known as "Paul Parmar," pleaded guilty to conspiracy to commit securities fraud. The plea was entered before U.S. District Judge Madeline Cox Arleo in Newark federal court.
From May 2015 through September 2017, Parmar and his conspirators, including Sotirios Zaharis and Ravi Chivukula, orchestrated a scheme to defraud investors out of hundreds of millions of dollars. This involved inflating the value of a publicly traded healthcare services company (referred to as Company A) on the London Stock Exchange’s Alternative Investment Market.
To fund the fraudulent transaction, a private investment firm provided approximately $82.5 million, while other financial institutions contributed around $130 million, totaling about $212.5 million. The conspirators misled investors into believing that Company A was worth more than its actual value.
Parmar and his associates attempted to raise additional funds in public markets under the pretense of acquiring subsidiaries for Company A. However, many entities were either nonexistent or generated significantly less income than claimed. The group diverted funds through controlled bank accounts for unrelated purposes and fabricated bank records to misrepresent Company A’s revenue streams.
As a result of these actions, victims valued Company A at over $300 million during the transaction process to take it private. The scheme unraveled in September 2017 when Parmar and others resigned or were terminated from their positions with Company A. By March 2018, Company A filed for bankruptcy due largely to this fraudulent activity.
Parmar's plea agreement includes forfeiture of certain properties and bank account contents, along with restitution payments to any victims affected by his offenses. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
U.S. Attorney Habba acknowledged the efforts of special agents from the Federal Bureau of Investigations led by Special Agent Brian Driscoll and assistance from FBI Headquarters Forensic Accountant Support Team.
Assistant U.S. Attorneys Vinay S. Limbachia, George M. Barchini, and Kelly M. Lyons are representing the government in this case.
Charges against co-defendants Zaharis and Chivukula remain accusations; they are presumed innocent until proven guilty.
