Home » Paul Parmar Pleads Guilty in $200M Healthcare Fraud Scheme

Paul Parmar Pleads Guilty in $200M Healthcare Fraud Scheme

Ex-CEO admits to securities fraud in Newark federal court

by Sophia Bennett

NEWARK, N.J. — The former CEO of a healthcare services firm has admitted to his role in a massive $200 million investment fraud scheme, according to U.S. Attorney Alina Habba.

Parmjit Parmar, also known as Paul Parmar, 55, of Colts Neck, New Jersey, pleaded guilty in Newark federal court to one count of conspiracy to commit securities fraud. The hearing was held before U.S. District Judge Madeline Cox Arleo.

According to court filings, Parmar and his co-conspirators — Sotirios “Sam” Zaharis and Ravi Chivukula — carried out the fraud between May 2015 and September 2017. They intentionally inflated the value of a publicly traded healthcare company, referred to as Company A, which was listed on the London Stock Exchange’s Alternative Investment Market.

The fraudulent scheme aimed to mislead investors and financial institutions into funding a $212.5 million transaction to take the company private. The team falsified revenue data, created fake subsidiaries and customers, doctored bank records, and siphoned proceeds from stock offerings into their own accounts.

As a result of these manipulations, investors and lenders were misled into valuing the company at over $300 million, far more than its actual worth. When the truth surfaced in September 2017, Parmar and his associates were ousted, and Company A filed for bankruptcy in March 2018, citing the fraud as a central cause.

Under the terms of his plea deal, Parmar will forfeit various assets and pay restitution to victims, with amounts to be determined by the court. The charge carries a maximum sentence of five years in prison and a $250,000 fine.

The case is being prosecuted by Assistant U.S. Attorneys Vinay S. Limbachia, George M. Barchini, and Kelly M. Lyons, and was investigated by the FBI, with support from its Forensic Accountant Support Team.

Co-defendants Zaharis and Chivukula still face charges and are presumed innocent until proven guilty.

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