Indian-origin investor Paramjit “Paul” Parmar, who once described himself as recession-proof as he continued to spend money in 2008, has been sentenced to five years in prison. Parmar pleaded guilty to conspiracy to commit securities fraud, which involved inflating revenues, falsifying bank records and misleading investors in the publicly traded health care company where he served as CEO. It is estimated that more than $212 million was involved in fraud.
39,000 square foot mansion in New Jersey
Parmar was known for his lavish lifestyle and his 39,000-square-foot mansion was widely featured in the media. An account from the time describes how his mansion had an underground tunnel connecting the main house to the entertainment building. The annex had an indoor pool, bowling alley, wine cellar, gym, mini theater, bar. One of the many ponds on the property was a saltwater pond surrounded by imported sand.In 2008, at the height of the global financial meltdown, Parmar gave interviews and declared that the recession had no effect on him and claimed that he was helping the economy by continuing to spend heavily on luxury goods. He told reporters that he had recently purchased a $110,000 BMW for his girlfriend and a Bentley for himself.However, by 2011, Parmar’s financial fortunes had reversed. The mansion entered foreclosure proceedings with approximately $26.3 million owed primarily to Deutsche Bank.
self made entrepreneur
In his previous interviews, Parmar had said that he grew up in India and came to the United States at the age of 19. He started out on his own without the support of his family. At the age of 25, he founded Pegagus Consulting Group and then ventured into several businesses.
Fraud
Court documents show Parmar’s legal troubles stemmed from his leadership at a health care company. He and others allegedly created fake customer lists, prepared financial statements and used fake documents to attract investors.“From May 2015 to September 2017, Parmar and his coconspirators, including Sotirios Zaharis, alias “Sam Zaharis,” and Ravi Chivukula, perpetrated an elaborate scheme to defraud a private investment firm and others of millions of dollars in connection with the financing of a transaction to take a publicly traded healthcare company private on the London Stock Exchange. To fund the transaction, the private investment firm invested approximately $82.5 million and a consortium of financial institutions invested an additional $130 million, for a total of approximately $212.5 million. “The conspirators used fraudulent means to inflate the company’s value excessively and cause others to believe that it was worth significantly more than its true value,” the court document said.