Ophthalmologist pleads guilty to fraud charges

Dr. Potarazu

Sreedhar Potarazu, MD, an ophthalmologist and entrepreneur from Maryland, recently pled guilty to $30 million in shareholder fraud and and $7.5 million in tax evasion. He was arrested on October 6, 2016. 

“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. “This case is a prime example of this office’s ongoing commitment to bringing white-collar criminals to justice.”

Continue to learn several facts about Dr. Potarazu and the case you may have not known about.

Dr. Potarazu founded the company VitalSpring Technologies, Inc. in 2000. It was branded as a software company focused on providing data science applications to enhance healthcare delivery.

“Sreedhar Potarazu created a complex web of lies to deceive VitalSpring shareholders, using false documents, fictitious websites, and fake potential buyers to induce investments and conceal the precarious financial status of the company, including millions of dollars of employment tax that he diverted from the U.S. Treasury,” said Principal Deputy Assistant Attorney General Caroline D. Ciraolo in a Department of Justice release.

She went on to call it a “multi-layered scheme.”

Court records show that Dr. Potarazu provided his company's shareholders with false and misleading information since 2009, during which time the campany was operating at a loss. Still, Dr. Potarazu told investors revenue was growing, acquisition was near, and that the company had a large amount of capital already saved.

VitalSpring Technologies, Inc. began doing business as Enziime, LLC in 2015. About 160 investors were the victims of Dr. Potarazu's deceit, all of which were also under the impression the company was in full compliance with its tax liabilities. According to court documents, the company was apprised numerous times between 2007 and 2016. In 2011 and 2012, Dr. Potarazu was interviewed by IRS Special Agents and was informed of the accrued employment tax liability. 

Dr. Potarazu is from Potomac, MD, the city which CNN Money ranked as the most affluent town in the United States in 2013. The city has a median income of $112,452, which is almost three times that of the national median income. In addition, 44.2% of Potomac residents have a graduate degree, while only about 8.9% of Americans have one, according to CNN Money. The general area has also been called home by Mike Tyson, astronaut John Glenn (who recently passed away), and Sylvester Stallone.

He is licensed to practice ophthalmology in in Maryland and Virginia. In numerous publications and media sources, Dr. Potarazu is described as an "acclaimed" and "reknown" ophthalmologist. 

He earned his medical degree from George Washington Unviersity in Washington, DC in 1988 and his MBA from Johns Hopkins University in Baltimore, MD in 2002. 

He is the author of the book "Get Off The Dime: The Secret of Changing Who Pays for your Health Care." The book includes a praise from Dr. Oz. 

His political donations to the Democratic National Convention (DNC) of over $300,000 caught him in an email debate between DNC officials (released from WikiLeaks) about whether his donations should be reason to give him a seat next to President Obama at a DNC event. Dr. Potarazu also gave hundreds of thousands of dollars to various other committees including the Democratic Hope Fund, Marco Rubio for President, Paul Ryan for Congress, Inc., and Hillary Clinton for America. His political donations were not related to his fraud scheme.

Despite many Democratic party donations, Dr. Potarazu was a frequent commentator and columnist on FOX. 

Former Senate majority leader Tom Daschle (D-SD) and former House speaker Newt Gingrich (R-Ga.) were on the advisory board of Dr. Potarazu's VitalSpring company.

In court documents, Dr. Potarazu was said to have taken just under $1 million of his company's money for personal expenses.

According to court documents, Dr. Potarazu faces a maximum penalty of 10 years in prison. He will be sentenced on March 3, 2017.