The former CEO of an unnamed, publicly traded healthcare services company was sentenced to five years in prison for his role in a $212 million scheme to defraud investors.
Five things to know:
1. Parmjit “Paul” Parmar, of Colts Neck, N.J., was sentenced to prison after pleading guilty in May to conspiracy to commit securities fraud, according to a May 8 Justice Department news release. In addition to the prison sentence, he was also ordered to pay more than $125 million in restitution.
2. From May 2015 through September 2017, Mr. Parmar and two co-conspirators were alleged to have orchestrated a scheme to defraud a private investment firm and other lenders out of hundreds of millions of dollars tied to a transaction that took a healthcare services company private from the London Stock Exchange’s alternative investment market.
3. The investment firm contributed about $82.5 million while a consortium of financial institutions provided another $130 million. The Justice Department alleged the conspirators inflated the company’s value by fabricating revenue streams, creating fake customers and altering bank records.
4. The Justice Department said some subsidiaries tied to acquisition efforts either did not exist or generated only a fraction of the revenue attributed to them. They also alleged the conspirators diverted offering proceeds through accounts they controlled and used the money for unrelated purposes.
5. The scheme was uncovered in September 2017 when Mr. Parmar and his co-conspirators resigned from their positions or were terminated. The company and several affiliated entities later filed for bankruptcy in March 2018.
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