The former CEO of a publicly traded healthcare services company has been sentenced to five years in prison for orchestrating a $212.5 million investment fraud scheme.
The U.S. Department of Justice says Parmjit Parmar, also known as Paul Parmar, pleaded guilty to conspiracy to commit securities fraud. The 55-year-old from Colts Neck, New Jersey, was also sentenced to three years of supervised release and ordered to pay more than $125 million in victim restitution.
Prosecutors say from May 2015 through September 2017, Parmar and his co-conspirators defrauded a private investment firm and others tied to a transaction to take private a healthcare company listed on the London Stock Exchange's Alternative Investment Market.
A private investment firm contributed about $82.5 million to fund the deal, while a consortium of financial institutions added another $130 million. The conspirators used phony customers, altered bank statements, and fabricated bank records to inflate the company’s value. They also funneled proceeds from secondary offerings through controlled bank accounts for unrelated purposes.
The scheme unraveled in September 2017 when Parmar and his co-conspirators resigned or were terminated. The company and its affiliates filed for bankruptcy on March 16, 2018.