Parmjit “Paul” Parmar, an Indian-origin investor who once described himself as “recession-proof” while splurging money during the 2008 financial crisis, has been sentenced to five years in prison.
Parmar pleaded guilty to conspiracy to commit securities fraud involving inflated revenues, falsified bank records and misleading investors in a publicly traded healthcare services company where he served as CEO. The fraud is estimated to have involved more than $212 million.
Parmar was once known for his lavish lifestyle. His 39,000-sq ft New Jersey mansion was widely featured in the media. Reports from that period described the property as having an underground tunnel connecting the main house to an entertainment annex.
The annex reportedly included an indoor pool, bowling alley, wine cellar, gym, mini theatre and bar. Among the many attractions at the property was a saltwater pool surrounded by imported sand.
In 2008, at the height of the global financial meltdown, Parmar gave interviews claiming that the recession had not affected him.
He said he was helping the economy by continuing to spend heavily on luxury items. He reportedly told journalists that he had bought a $110,000 BMW for his girlfriend and a Bentley for himself.
However, by 2011, Parmar’s financial fortunes had changed dramatically. His mansion entered foreclosure proceedings, with around $26.3 million owed, mainly to Deutsche Bank.
In earlier interviews, Parmar said he grew up in India and moved to the United States at the age of 19. He claimed he started on his own without financial support from his family. At 25, he founded Pegasus Consulting Group and later entered several other businesses.
Court documents show that Parmar’s legal troubles were linked to his leadership of a healthcare company. He and others allegedly created fake customer lists, fabricated financial statements and used falsified documents to attract investors.
According to court documents, from May 2015 to September 2017, Parmar and his co-conspirators, including Sotirios Zaharis, also known as Sam Zaharis, and Ravi Chivukula, orchestrated an elaborate scheme to defraud a private investment firm and others of hundreds of millions of dollars.
The fraud was connected to the funding of a transaction to take private a healthcare services company that was publicly traded on the London Stock Exchange’s Alternative Investment Market.
To fund the transaction, the private investment firm contributed around $82.5 million, while a consortium of financial institutions provided another $130 million, taking the total to approximately $212.5 million.
Prosecutors said the accused used fraudulent methods to grossly inflate the company’s value and misled others into believing that it was worth far more than its actual value.
