Ex-healthcare CEO from Colts Neck NJ admits to criminal conspiracy
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NEWARK — A Colts Neck man, who was chief executive officer of a publicly-traded healthcare services company, has admitted his role in a conspiracy to defraud investors in the purchase or sale of the company’s securities, said U.S. Attorney Alina Habba.
Parmjit Parmar, also known as Paul Parmar, 55, pleaded guilty to conspiracy to commit securities fraud, before U.S. District Judge Madeline Cox Arleo, Habba announced Wednesday.
From May 2015 through September 2017, Parmar was identified as a figure in a scheme to defraud a private investment firm and other lenders out of hundreds of millions of dollars. The illicit plan involved taking private an unnamed healthcare services company that was being publicly-traded on the London Stock Exchange, according to the U.S. Attorney’s Office for the District of New Jersey.
To fund the transaction, a private investment firm put up approximately $82.5 million and a consortium of financial institutions put up another $130 million, for a total of about $212.5 million, according to the statement.
Investors were deceived into believing the company was worth substantially more than its actual value. Parmar and the conspirators sought to raise tens of millions of dollars in the market, purportedly to fund various operating subsidiaries, which either did not exist or had only a fraction of the operating income attributed to them, the statement said.
Bank statements and records were altered, and “phony customers” concocted — all to inflate the value of the company to $300 million for the purposes of financing the transaction to take the company private, according to the U.S. Attorney’s Office.
The scheme was uncovered in September 2017, when Parmar and his conspirators resigned from their positions with the healthcare services company or were terminated. On March 16, 2018, the company and some of its affiliated entities filed for bankruptcy, attributing the company’s financial demise, in large part, to the fraud scheme, the statement said.
The conspiracy to commit securities fraud carries a maximum penalty of five years in prison and a $250,000 fine. Under the terms of a plea agreement, Parmar will accept the forfeiture of certain properties and the contents of several bank accounts, and the federal judge will decide how much restitution Parmar will pay for his crime, according to the U.S. Attorney’s Office.
Contact Asbury Park Press Erik Larsen at [email protected].
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