Potarazu failed to pay over more than $7.5 million in employment taxes to the IRS.
Dr Sreedhar Potarazu, a renowned Indian American ophthalmologist and entrepreneur, who is the founder UTSAV festival, has been sentenced to 10 years for defrauding his former company’s shareholders worth $49 million.
According to the official press release of Department of Justice, Potarazu founded VitalSpring Technologies that offered data analysis and services relating to health care expenditures. He allegedly provided materially false and misleading information to the shareholders of VitalSpring to induce more than $49 million in capital investments in the company.
Potarazu reportedly also admitted that he concealed from shareholders that VitalSpring failed to account for and pay over more than $7.5 million in employment taxes to the IRS.
“Like a director employing actors and props on a stage, Sreedhar Potarazu arranged for an imposter to pose as a buyer, provided a link to a bogus website and supplied fraudulent balance sheets, phony bank statements and false tax returns to convince VitalSpring investors and potential buyers that the company was financially healthy and up-to-date on its taxes,” said Acting Deputy Assistant Attorney General Goldberg. “As a result of his actions, shareholders are out more than $49.5 million and over $7.5 million in employment taxes due to the U.S. Treasury were diverted and never paid. With Potarazu’s conviction and the sentencing hearings in this case, his fraud has been revealed, and today’s imposition of a 119 month sentence holds him fully accountable for his actions.”
“For years Potarazu enriched himself by abusing the trust of his company’s many investors and stealing millions of dollars from them through a complex scheme of fraud and deceit,” said U.S. Attorney Dana J. Boente for the Eastern District of Virginia. “This case is a prime example of this office’s ongoing commitment to bringing white-collar criminals to justice.”
“For almost a decade, Potarazu put greed ahead of his shareholders and employees by building a complex web of deceit and fraud while at the same time evading paying his employment tax liability,” said Chief Don Fort, IRS Criminal Investigation. “Today’s sentencing serves as a reminder that these types of criminal actions will be punished and IRS-CI is committed to bringing culpable individuals to justice.”
“Potarazu ran a multi-million dollar scheme that caused significant financial losses to VitalSpring shareholders for almost a decade,” said Assistant Director in Charge Andrew W. Vale of the FBI’s Washington Field Office. “The FBI is committed to bringing white-collar criminals to justice and we will continue to work closely with our law enforcement partners, to investigate, charge and prosecute those who engage in criminally deceitful business practices.”
He was earlier selected as a “distinguished expert” by the Washington Post where he writes a weekly column on the national debate over health care. He also used to appear frequently on national television news shows, including the highly respected Fox Business Channel’s Your World with Neil Cavuto, Bulls & Bears, and Stuart Varney.