Freehold Man, 2 Others Charged In Multimillion-Dollar Scam

NEWARK, NJ — A Freehold man is one of three people accused of creating fake customer lists, altering bank accounts and setting up fake mergers in an elaborate scheme to defraud investors and others out of hundreds of millions of dollars as they sought to convert a publicly traded healthcare company into a private entity, federal authorities allege.

Ravi Chivukula, 44, of Freehold; Parmjit “Paul” Parmar, 48, of Colts Neck; and Sotirios “Sam” Zaharis, 51, of Weehawken, all are charged with one count of conspiracy to commit securities fraud and one count of securities fraud, according to the announcement by U.S. Attorney Craig Carpenito and Acting Assistant Attorney General John P. Cronan that was released Wednesday.

Parmar, the former CEO of Constellation Healthcare Technologies, was arrested Wednesday and was expected to be arraigned in the afternoon, Carpenito's office said. Chivukula, chief financial officer of Orion HealthCorp, and Zaharis, chief financial officer of Constellation Healthcare, both remained at large, authorities said.

Authorities allege that from May 2015 through September 2017, the three men orchestrated an elaborate scheme to defraud a private investment firm and others in connection with the funding of a transaction to take private Constellation Healthcare, which was traded publicly on the London Stock Exchange’s Alternative Investment Market.

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To fund the transaction, the private investment firm put up $82 million, and a consortium of financial institutions put up another $130 million,. Authorities allege the three men usd fraudulent methods to grossly inflate the value of Constellation Healthcare to "trick others into believing that (Constellation) was worth substantially more than its actual value."

The complaint alleges that to present a positive picture of the company’s financial wealth, the defendants allegedly sought to raise tens of millions of dollars in the public markets, purportedly to fund acquisitions of various operating subsidiaries.

But authorities allege a number of those entities either did not exist or had only a fraction of the operating income attributed to them.

"The conspirators allegedly funneled the proceeds of these secondary offerings through bank accounts they controlled and used the money for a variety of purposes that had nothing to do with acquiring the purported targets," Carpenito's office said.

The money from one of the offerings was instead used to make it appear as if the operating subsidiary had substantial customer revenue when, in fact, the funds were simply transfers of the money that had been raised in the secondary offering.

"The defendants went to great lengths to make it appear that these funds were revenue, concocting phony customers and altering bank statements to make it appear as if the funds were coming from customers," autorities said.

The conspirators 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 scheme was uncovered around September 2017, when the three resigned from their positions or were terminated, authorities said. On March 16, 2018, Constellation and numerous of its affiliated entities filed for bankruptcy, attributing the company’s financial demise, in large part, to the fraud scheme, authorities said.

The United States is expected to file a separate civil complaint today seeking forfeiture of four properties that Parmar owns or controls, including a house in Colts Neck and three apartments in New York City. Separately, the U.S. Securities and Exchange Commission also filed a civil complaint Wednesday against Parmar, Zaharis and Chivukula, authorities said.

The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine, if the three are convicted.

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