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Bankrupt well being care firm executives accused of creating up phony clients, subsidiaries

Three former executives of a publicly traded medical-billing firm have been charged Wednesday, accused of making phony clients, subsidiaries and acquisitions to make the enterprise seem extra enticing to buyers earlier than taking it non-public.

The executives previously ran Constellation Healthcare Applied sciences Inc., a Central Islip, N.Y., firm that was publicly traded on the London Inventory Alternate’s Different Funding Market. Constellation declared chapter in March, claiming it had belongings of $10 million to offset liabilities of practically $500 million.

Permjit “Paul” Parmar, 48, of Colts Neck, New Jersey; Sotirios “Sam” Zaharias, 51, of Weehawken, New Jersey; and Ravi Chivukula, 44, of Freehold, New Jersey, are every charged with one depend of conspiracy to commit securities fraud and one depend of securities fraud, the U.S. Division of Justice mentioned Wednesday.

FBI brokers arrested Mr. Parmar on Wednesday morning, whereas Mr. Zaharais and Mr. Chivukula stay at massive, based on the Justice Division.

The defendants sought to lift of tens of tens of millions of from public choices to buy corporations that both didn’t exist or solely had a fraction of the income Constellation claimed, based on court docket paperwork. Cash raised for the acquisitions was allegedly funneled to financial institution accounts managed by the defendants, the Justice Division mentioned.

Prosecutors mentioned not solely did the trio create phony corporations, but in addition falsified banks data, made up subsidiaries and faux clients to inflate the worth of these transactions.

Individually, the Justice Division filed a civil criticism looking for forfeiture of our properties Mr. Parmar owns or controls, together with a home in Colt’s Neck and three residences in New York Metropolis. The U.S. Securities and Alternate Fee additionally filed a civil compliant Wednesday towards the defendants.

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