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Maryland Cardiologist Convicted
of Evading more Than $16 Million in Income Taxes
Did Not Report More Than $40 Million in Profits from Stock Trading
GREENBELT, MD
Oct. 08, 2009
A federal jury today convicted Pradeep Srivastava, age 50, of Potomac,
Maryland, a cardiologist who maintained offices in Greenbelt and
Oxon Hill, of evading more than $16 million dollars in income taxes
for the 1998 and 1999 tax years, and filing a false tax return for
2000, announced United States Attorney for the District of Maryland
Rod J. Rosenstein and Acting Assistant Attorney General John DiCicco
of the Department of Justice Tax Division.
United States Attorney Rod J. Rosenstein said, “Anyone who
thinks it is safe to evade taxes should think again, because the
IRS and the Department of Justice are working to find tax cheats
and send them to federal prison.”
“We should not forget that the ultimate victim of tax fraud
is the honest taxpayer and the numerous programs funded by the government,”
stated C. André Martin, Internal Revenue Service-Criminal
Investigation Special Agent in Charge. “While taxpayers have
the right to contest their tax liabilities in the courts, taxpayers
do not have the right to violate tax laws.”
According to evidence presented at the six day trial, Srivastava
conducted a huge volume of trading in stocks and stock options.
During the “bull market” of the late 1990s, the evidence
showed that he earned more than $40 million in short-term capital
gains, much of them from trading in stock options involving high-technology
stocks such as America Online, Dell Computer, Yahoo, Qualcomm and
Inktomi. In preparation for filing his tax returns for 1998 and
1999, Srivastava provided his accountant with information about
those trades that generated capital losses, but omitted providing
information relating to the vast majority of his short-term capital
gains. Srivastava then filed tax returns which omitted those capital
gains and, according to trial testimony, understated his tax due
by $164,756 in 1998 and $16,179,567 in 1999.
The evidence proved that in 2000, the value of Srivastava’s
portfolio collapsed and he incurred massive capital losses. Disclosure
of the full extent of those losses, however, would have potentially
alerted the Internal Revenue Service to his massive, undisclosed
short-term capital gains for 1998 and 1999, therefore, trial testimony
showed that Srivastava filed a false tax return which understated
his capital losses for 2000.
Srivastava faces a maximum penalty of five years imprisonment and
a $250,000 fine for each of two counts of tax evasion and a maximum
sentence is three years in prison, and a $250,000 fine for filing
a false income tax return. U.S. District Judge Roger W. Titus has
scheduled sentencing for January 11, 2010 at 10:00 a.m. and placed
Srivastava on home detention pending sentencing. Judge Titus also
ordered Srivastava to pledge two parcels of real estate in Potomac,
Maryland as security for his appearance.
In a related investigation, in August 2007, Srivastava agreed to
pay the United States $476,000 to settle claims that he fraudulently
billed Medicare and the Federal Health Employees Health Benefits
Program (“FEHBP”) over a three and a half year period.
According to the settlement agreement, the government contended
that Srivastava committed multiple billing abuses from November
1, 1999 to May 31, 2003, including billing for services not rendered;
“unbundling,” a practice where a provider bills for
multiple component parts of a procedure as opposed to billing one
comprehensive CPT code; and upcoding, or billing for a service at
a higher level than that which was furnished. Assistant U.S. Attorney
Thomas F. Corcoran, handled the case.
United States Attorney Rod J. Rosenstein commended the Internal
Revenue Service’s Criminal Investigation Division, the Department
of Health and Human Services - Office of Inspector General, the
Federal Bureau of Investigation and the Office of Personnel Management
- Office of Inspector General for their investigative work in this
case. Mr. Rosenstein and Mr. DiCicco thanked Assistant U.S. Attorney
Stuart A. Berman and Trial Attorney John E. Sullivan, of the Department
of Justice Tax Division, who are prosecuting the case.
http://baltimore.fbi.gov/dojpressrel/pressrel09/ba100809.htm
NRI Cardiologist
Accused of Tax Evasion $16 million
Maryland, October 20, 2005
Ramesh Agnihotri
NRI (non-resident Indian) Dr. Pradeep Srivastava,Cardiologist,
46, was charged in United States District Court in Greenbelt (Maryland)
of tax evasion, which carries a maximum penalty of five years in
prison and a $25,0000 fine.
Srivastava made more than $40 million in short-term capital gains
during 1998 and 1999 by trading stocks and stock options and tax
evasion amounting to more than $16 million
He was born in India and received a medical degree in London before
moving to Maryland.
Maryland U.S. Attorney Rod J. Rosenstein said:
- The indictment accuses Srivastava of three counts of filing
a false tax return and tax evasion.
- Anyone who thinks it is safe to evade taxes should think again,
because the IRS and the Department of Justice are working to find
tax cheats and send them to federal prison
Yesterday, he appeared before U.S. Magistrate Judge Jillyn K. Schulze
in federal court in Greenbelt. He did not enter a plea during the
brief hearing, and Schulze released him on his own recognizance.
- In 1998, Srivastava reported earning nearly $1.1 million, which
translated to a tax burden of $406,213. Earnings from the stock
market, Srivastava made more than $1.6 million that year, which
meant a tax bill of $570,969
- In 1999, reported to the IRS that he had earned $891,535 in
income; the tax due on that was $326,209. His stock market earnings,
Srivastava's income for that year was $41.8 million, and the tax
was about $16.5 million
- In January 2000, his stock portfolio peaked around $187 million
AND BY December 2000, it was worth less than $500,000 AFTER bubble
burst
The value of his stock portfolio peaked in January 2000, around
$187 million, prosecutors said. Then the technology stock market
bubble burst, and the portfolio's value crashed. By December 2000,
it was worth less than $500,000, the indictment says.

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