Indian-American entrepreneur pleads guilty to Investment Fraud Scheme

Sreedhar Potarazu, ophthalmologist and entrepreneur Photo courtesy: LinkedIn page of Sreedhar Potarazu

Sreedhar Potarazu, ophthalmologist and entrepreneur pleaded guilty on December 2, 2016, to charges of using his company to orchestrate a US$30 million investment fraud scheme.

The Indian-American is scheduled to be sentenced on March 3, 2017, and could spend up to 10 years behind bars.

The 51-year-old Potarazu, of Potomac, Maryland, was arrested on October 6.

Although he had emerged as a major political donor as of late, the scheme does not directly link back to his political donations.

According to Potarazu's LinkedIn page, he owned VitalSpring Technologies from 2000 until July 2015 and provided technology to companies as a means to help them analyse and control their healthcare costs.

However, the company failed to pay US$6 million in employment taxes from 2007 to 2015, and Potarazu never informed investors of the liability, as per an FBI affidavit.

Potarazu pulled US$900,000 from the company for personal expenses, even as tax returns showed the company lost US$31 million between 2007 and 2013, told the affidavit.

The affidavit further explained that Potarazu, now the president and chief executive at software company Enziime, raised US$30.5 million from more than 160 investors between 2011 and 2015. One shareholder was found to have invested about US$16 million, including a US$344,000 payment, as recent as August.

Sreedhar Potarazu has faced civil lawsuits related to his company for years, with multiple tax liens and civil judgments filed against him. He earned his MBA at Johns Hopkins University and received his medical degree from George Washington University before that.

Author
Garima Kapil
Garima Kapil – Senior Writer

Garima Kapil has around five years of experience in the field of writing and editing. Specialised in writing, performing proof-reading and text editing functions along with content ideation; she has worked with leading e-commerce and as a freelancer. She writes on lifestyle, news, telecom, travel, education, healthcare, immigration, along with other subjects required as a full-time writer and freelancer. 

Comments