The announcement of the arrest and the charges regarding Pavandeep Bakhshi, 41, of United Kingdom, were announced Dec. 10 in a press release from U.S. Attorney Craig Carpenito for the District of New Jersey and Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division
Bakhshi is charged by complaint with one count of conspiracy to commit securities fraud and one count of securities fraud. The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
According to the complaint unsealed this weekend:
From May 2015 through September 2017, Bakhshi and co-conspirators Parmjit Parmar, aka “Paul Parmar,” Sotirios Zaharis, aka “Sam Zaharis,” and Ravi Chivukula allegedly orchestrated an elaborate scheme to defraud a private investment firm and others out of hundreds of millions of dollars in connection with the funding of a transaction to take private a healthcare services company (Company A) traded publicly on the London Stock Exchange’s Alternative Investment Market. To fund the transaction, the private investment firm put up $82 million and a consortium of financial institutions put up another $130 million. The scheme allegedly utilized fraudulent methods to grossly inflate the value of Company A and trick others into believing that Company A was worth substantially more than its actual value.
To make the company appear more valuable than it was, the defendants 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; and made material misrepresentations and omissions to the private investment firm and others.
The alleged scheme was uncovered around September 2017, when the accused resigned from their positions with Company A or were terminated. On March 16, Company A and numerous of its affiliated entities filed for bankruptcy, attributing the company’s financial demise, in large part, to the fraud scheme.
The United States filed a criminal complaint against Parmar, Zaharis and Chivukula on May 16 for their alleged roles in the scheme. Zaharis and Chivukula currently are fugitives. The United States also filed a separate civil complaint on the same date seeking forfeiture of four properties that Parmar owns or controls, including a house in Colt’s Neck, N.J., and three apartments in New York City. Separately, the U.S. Securities and Exchange Commission filed a civil complaint on May 16 against Parmar, Zaharis and Chivukula.