On May 16, 2018, three former executives of a publicly traded healthcare services company were charged with conspiracy to commit securities fraud and securities fraud for their respective roles in an alleged scheme to defraud investors in connection with a purported $300 million going-private transaction.  According to authorities, New Jersey residents Parmjit “Paul” Parmar, Sotirios “Sam” Zaharis, and Ravi Chivukula used a variety of fraudulent methods to inflate the value of unnamed “Company A” to raise investor funds for purported acquisitions of subsidiary entities.  Parmar, Zaharis, and Chivukula are accused of funneling investor monies through these entities to fraudulently create the appearance that the subsidiaries had substantial revenue from business operations.  Authorities maintain that these individuals also created fictitious operating entities, fabricated bank records, and generated fake records of purported income streams to defraud investors as well as financial institutions that provided debt financing.  Several of the purported subsidiary entities were found to be nonexistent or to have only a fraction of the operating income claimed.  The alleged scheme was reportedly uncovered around September 2017 when the defendants resigned or were terminated from their positions with Company A, which filed for bankruptcy protection in March 2018.

United States v. Parmar, 18-cr-00343 (D.N.J.)

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