British man charged in alleged £239 million investment fraud
A British man has been charged in the US for allegedly participating in a 300 million US dollar (£239 million) scheme to defraud investors in a deal to take a London-listed healthcare company private.
Pavandeep Bakhshi, 41, was charged with one count of conspiracy to commit securities fraud and one count of securities fraud.
He was arrested in John F Kennedy International Airport on Saturday evening after arriving in New York on a flight from London.
The US Department of Justice said Mr Bakhshi, along with Parmjit “Paul” Parmar, Sotirios “Sam” Zaharis, and Ravi Chivukula allegedly used fraudulent methods to inflate the value of the AIM-listed healthcare services company and trick others into believing that it was worth substantially more than it actually was.
To fund the deal, a private investment firm put up 82 million US dollars and a group of financial institutions invested an additional 130 million US dollars, according to the DoJ.
The conspirators allegedly sought to raise tens of millions of US dollars to fund the healthcare service company’s acquisitions of various subsidiaries, but a number of them either did not exist or had only a fraction of the operating income attributed to them.
They then allegedly channelled the proceeds of the fundraising to bank accounts they controlled with the money raised used to make it appear it had substantial amount of revenue.
The DoJ said the scheme was uncovered last September, when the conspirators resigned from their positions or were terminated from their roles at the healthcare services company which filed for bankruptcy on March 16.
The US government filed a criminal complaint against Mr Parmar, Mr Zaharis and Mr Chivukula on May 16 for their alleged roles in the scheme. The Department of Justice said Mr Zaharis and Chivukula are currently fugitives.
The government also filed a civil complaint to seize four of Mr Parmar’s properties.
The US regulator, the Securities & Exchange Commission, has also filed a complaint against Mr Parmar, Mr Zaharis and Mr Chivukula.
