NEWARK, N.J. — Former healthcare company executive Parmjit Parmar was sentenced to five years in federal prison for his role in a conspiracy that defrauded investors out of more than $212 million, federal prosecutors announced.
Parmar, also known as “Paul Parmar,” 55, of Colts Neck, New Jersey, was sentenced May 5 after previously pleading guilty to conspiracy to commit securities fraud in Newark federal court, according to the U.S. Attorney’s Office for the District of New Jersey.
U.S. District Judge Madeline Cox Arleo sentenced Parmar to 60 months in prison, followed by three years of supervised release. He was also ordered to pay more than $125 million in restitution to victims.
Federal prosecutors said Parmar and his co-conspirators, including Sotirios Zaharis and Ravi Chivukula, orchestrated a scheme between May 2015 and September 2017 to inflate the value of a healthcare services company traded on the London Stock Exchange’s Alternative Investment Market.
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According to court documents, a private investment firm invested approximately $82.5 million and a consortium of financial institutions contributed another $130 million to finance a deal to take the company private, bringing the total investment to about $212.5 million.
Prosecutors said the conspirators falsely inflated the company’s financial condition and misrepresented the value of several operating subsidiaries. Some of the entities involved in the purported acquisitions either did not exist or generated only a small fraction of the income attributed to them, authorities said.
The scheme also involved routing proceeds from secondary stock offerings through bank accounts controlled by the conspirators and disguising the money as company revenue. Prosecutors said the group created fake customers and altered bank statements to conceal the fraud.
Authorities said Parmar and his associates fabricated bank records and made false statements and omissions to investors and financial institutions, causing victims to value the company at more than $300 million during the transaction.
The fraud was uncovered in September 2017 after Parmar and other conspirators resigned or were terminated from the company. In March 2018, the company and several affiliated entities filed for bankruptcy, citing the fraud scheme as a major factor in its collapse.
U.S. Attorney Robert Frazer credited the FBI, under the direction of Special Agent in Charge Stefanie Roddy, and the FBI Headquarters Forensic Accountant Support Team for their work on the investigation.
The case was prosecuted by Assistant U.S. Attorneys George M. Barchini and Kelly M. Lyons, with assistance from Assistant U.S. Attorneys Olta Bejleri, Carolyn Silane and Peter A. Laserna, according to the Justice Department.