Healthcare Fraud A Recurring Theme

The Securities and Exchange Commission announces fraud charges against three former Constellation Healthcare Technologies executives. The complaint charges former Constellation chief executive Parmjit (Paul) Parmar, former chief financial officer Sotirios (Sam) Zaharis, and former company secretary Ravi Chivukula.

According to the SEC’s complaint, the executives convince a private firm to acquire the majority of Constellation’s equity. The Constellation executives achieve their goal through the falsification of financial information to the acquiring firm during the negotiation. Shortly thereafter, Constellation files for bankruptcy, not more than a year after the 2017 acquisition. Evidently, the transaction is nothing new, as Mr. Parmar is known for suspicious sham transactions.

Self Interest a Non-Player

At the end of 2017, a shareholder files a lawsuit against Constellation Health and Mr. Parmar claiming the company formation is “a sham, created to siphon assets… into the pocket of Parmar,” according to a court filing. Moreover, Destra Targeted Income Unit Investment Trust, on behalf of the holders of Constellation units, accuse Parmar of self-dealing: