Parmjit “Paul” Parmar (48), Sotirios “Sam” Zaharis (51) and Ravi Chivukula (44) of Colts Neck, Weehawken and Freehold, New Jersey respectively were charged May 16, 2018 in an elaborate $300 million investment fraud scheme.
According to the New Jersey District Attorney’s Office, Parmar, Zaharis and Chivukula who were former CEO and CFO and executive director respectively of a publicly traded health care services company allegedly orchestrated a widespread scheme to defraud investors and others out of hundreds of millions of dollars in connection with a merger transaction designed to convert the company into a private entity.
The three New Jersey conspirators according to the complaint filed allegedly:
- Created fictitious operating companies that Company A purportedly acquired in sham acquisitions.
- Falsified and fabricated bank records of subsidiary entities in order to generate a phony picture of Company A’s revenue streams.
- Generated fake income streams and phony customers of Company A and its subsidiaries.
- Made material misrepresentations and omissions to the private investment firm and others.
The alleged 300 million investment fraud scheme was uncovered around September 2017, when Parmar, Zaharis and Chivukula have either resigned from their positions or were terminated.
Charges & Arrests
Parmar, Zaharis and Chivukula have been charged with with one count of conspiracy to commit securities fraud and one count of securities fraud.
Parmjit “Paul” Parmar was arrested by FBI on May 16, 2018 near his home in Colts Neck, NJ; where as Ravi Chivukula and Zaharis remain at large.
Besides charging with securities fraud, a civil complaint has also been filed May 16, 2018 by NJ District Attorney’s Office against Parmjit Parmar.
The May 16, 2018 civil complaint included forfeiture of four real estate properties – a house in Colt’s Neck and three apartments in New York City owned/controlled by Parmjit Parmar.
Separately, SEC has also filed a civil complaint against Parmar, Zaharis and Chivukula.
Penalty for Investment Fraud
On the conspiracy count, Parmar, Zaharis and Chivukula face a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.
And, the securities fraud count includes a maximum potential penalty of 20 years in prison and a $5 million fine.
Parmar, Zaharis and Chivukula must be presumed innocent unless and until proven guilty in a court of law.