NEWARK, N.J. – The former CEO of a publicly traded healthcare services firm pleaded guilty to conspiracy to commit securities fraud in a scheme that defrauded investors out of hundreds of millions of dollars, U.S. Attorney Alina Habba announced.
Parmjit Parmar, also known as Paul Parmar, 55, of Colts Neck, admitted in Newark federal court before U.S. District Judge Madeline Cox Arleo to orchestrating a fraud that inflated the value of a healthcare company traded on the London Stock Exchange’s Alternative Investment Market between May 2015 and September 2017.
Parmar, along with co-conspirators Sotirios Zaharis (a.k.a. “Sam Zaharis”) and Ravi Chivukula, misled investors into believing Company A had substantial revenues and legitimate acquisitions. In reality, many of the subsidiary entities they claimed to acquire either did not exist or earned far less income than reported. Parmar and his associates used falsified bank records and fabricated customers to create the illusion of high-value business operations.
To fund the fraudulent take-private transaction, a private investment firm contributed $82.5 million and a group of financial institutions added $130 million, totaling roughly $212.5 million. Parmar and his co-conspirators funneled funds raised from secondary offerings through accounts under their control for unrelated purposes.
Company bankruptcy and legal consequences
The scheme collapsed in September 2017, when the conspirators either resigned or were removed from Company A. The firm and several affiliates filed for bankruptcy in March 2018, citing the fraud as a primary cause of financial failure.
According to prosecutors, victims valued Company A at more than $300 million based on manipulated financials. Parmar and his co-conspirators produced altered bank statements and false revenue figures to maintain the deception.
The conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine. Parmar has agreed to the forfeiture of specific properties and bank account assets and will be required to pay restitution to defrauded investors as ordered by the court.
U.S. Attorney Habba credited the FBI’s Newark Division and its Forensic Accountant Support Team with leading the investigation.
