By: Richard L. Smith
A former New Jersey healthcare executive has pleaded guilty to orchestrating a multimillion-dollar securities fraud scheme designed to deceive investors and inflate the value of his publicly traded company, according to a statement released by the U.S. Department of Justice.
Federal officials said Parmjit Parmar, also known as “Paul Parmar,” 55, of Colts Neck, admitted in federal court to conspiracy to commit securities fraud in a case involving hundreds of millions of dollars in losses.
The plea was entered before U.S. District Judge Madeline Cox Arleo in Newark.
Federal prosecutors say that between 2015 and 2017, Parmar and co-conspirators—identified as Sotirios “Sam” Zaharis and Ravi Chivukula—engaged in a scheme to mislead investors about the financial health and value of a London Stock Exchange-traded healthcare company, referred to as Company A.
The conspirators falsely inflated the company’s revenue and fabricated business acquisitions to create the illusion of robust growth.
The fraudulent tactics were part of a plan to secure more than $212 million in funding to take the company private. Investigators said Parmar and his partners falsified bank records, invented customers, and altered financial documents to deceive both a private investment firm and a group of financial institutions.
Many of the subsidiaries the company claimed to acquire either did not exist or had minimal operations.
Authorities said the funds raised under false pretenses were diverted through accounts controlled by the defendants and used for personal expenses and unrelated purposes.
The deception led investors to value the company at over $300 million before the fraud came to light in late 2017, prompting the resignation or termination of the executive team.
By March 2018, the company and its affiliates filed for bankruptcy, citing the fraudulent activities as a primary cause of their collapse.
Parmar faces a maximum sentence of five years in prison and a $250,000 fine.
As part of his plea agreement, he will forfeit properties and bank accounts and must pay restitution to the victims.