A 55-year-old Indian-origin man from New Jersey, Parmjit Parmar, also known as Paul Parmer, has been sentenced to five years in prison for his role in a massive conspiracy to defraud investors. The sentence, handed down in a US court, also includes three years of supervised release and an order to pay $125 million in restitution.
Details of the Fraud Scheme
According to court documents, the fraudulent activities took place between May 2015 and September 2017. Parmar, along with co-conspirators Sotirios Zaharis, alias Sam Zaharis, and Ravi Chivukula, orchestrated an elaborate scheme to defraud a private investment firm and others out of hundreds of millions of dollars. The scheme was tied to funding a transaction to take a healthcare services company, publicly traded on the London Stock Exchange's Alternative Investment Market, private.
To finance the transaction, the private investment firm contributed approximately $82.5 million, and a consortium of financial institutions added another $130 million, bringing the total to around $212.5 million. The co-conspirators used fraudulent methods to grossly inflate the company's value, deceiving others into believing it was worth significantly more than its actual worth.
Fabricated Revenues and Phantom Entities
Parmar and his associates sought to raise tens of millions of dollars in public markets, ostensibly to fund the company's acquisitions of various operating subsidiaries. In reality, many of these entities either did not exist or had only a fraction of the operating income attributed to them. The conspirators funneled the proceeds from secondary offerings through bank accounts they controlled and used the money for purposes unrelated to acquiring the purported targets.
To conceal their actions, the conspirators went to great lengths to make the funds appear as legitimate revenue. They concocted phony customers and altered bank statements to create the illusion that the money was coming from real customers. Additionally, they falsified and fabricated bank records of subsidiary entities to generate a false picture of revenue streams and made material misrepresentations and omissions to the private investment firm and others.
Impact and Aftermath
The actions of Parmar and his co-conspirators caused victims to value the company at over $300 million for the purpose of financing the transaction to take it private. The scheme was uncovered in September 2017 when Parmar and his conspirators either resigned or were terminated from their positions. On March 16, 2018, the company and many of its affiliated entities filed for bankruptcy, attributing their financial collapse largely to the fraud scheme.
Parmar had pleaded guilty in 2025. The sentencing marks a significant step in holding those responsible for this large-scale investment fraud accountable.
