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SEC charges three former healthcare executives with fraud

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Staff Writer |
Constellation Healthcare Technologies
Acquisition   Constellation Healthcare Technologies

The Securities and Exchange Commission (SEC) announced fraud charges against three former Constellation Healthcare Technologies Inc. executives who falsified financial and other information they provided to a private firm in the course of negotiating the private firm’s acquisition of a majority stake in Constellation.

Houston-based Constellation filed for bankruptcy in March, a little more than a year after the January 2017 acquisition.

According to the SEC’s complaint, the executives convinced a private firm to acquire a majority of Constellation’s equity and provided fake information, including financial statements for three fictitious subsidiaries supposedly acquired for more than $62 million.

The complaint alleges that the former executives funded the sham acquisitions with stock sales in London and then diverted the proceeds to themselves.

The complaint charges former Constellation chief executive Parmjit (Paul) Parmar, former chief financial officer Sotirios (Sam) Zaharis, and former company secretary Ravi Chivukula.

In September 2017, amid concerns about Constellation’s financial condition, Parmar resigned and Zaharis and Chivukula were put on administrative leave.

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey announced criminal charges against Parmar, Zaharis, and Chivukula.

The SEC’s complaint, filed in U.S. District Court in New Jersey, charges Parmar, Zaharis, and Chivukula with violating the antifraud provisions of the federal securities laws.

The SEC is seeking permanent injunctions, return of allegedly ill-gotten gains plus interest, civil penalties, and officer-and-director bars against the Parmar, Zaharis, and Chivukula.

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