3 former execs at medical billing company face criminal charges in $300M investment fraud scheme


https://www.beckershospitalreview.com/legal-regulatory-issues/3-former-execs-at-medical-billing-company-face-criminal-charges-in-300m-investment-fraud-scheme.html

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Three former executives of Constellation Healthcare Technologies, a now-bankrupt medical billing company, were charged May 16 with orchestrating an elaborate scheme to defraud investors out of more than $300 million.

The former CEO, CFO and executive director stand accused of creating phony customers, subsidiaries and acquisitions and falsifying bank records to inflate the company’s value and revenue to defraud investors. They are charged with using these methods to make their publicly traded company appear more attractive and financially stable to investors before transitioning it to the private sector.

The alleged actions caused a private investment firm and other investors to value Constellation Healthcare at more than $300 million for purposes of financing the transaction to move the company private.

The scheme was discovered in September 2017, when the three executives resigned from their positions. On March 16,  Constellation Healthcare Technologies filed for bankruptcy, citing the alleged fraud scheme as the cause of its downfall.

Parmjit Parmar, Sotirios Zaharis and Ravi Chivukula are each charged with one count of conspiracy to commit securities fraud and one count of securities fraud.  The CEO, Mr. Parmar, was arrested May 16. Mr. Zaharais and Mr. Chivukula remain at large, according to the U.S. Justice Department.

https://www.justice.gov/opa/pr/former-ceo-cfo-and-director-health-care-services-company-charged-elaborate-300-million

 

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