Washington, Jan 29 (Inditop.com) An Indian American cardiologist has been sentenced to nearly four years in prison and ordered to pay back to the state the $16 million he failed to pay in income taxes.
Pradeep Srivastava, the 50-year-old cardiologist who had offices in Oxon Hill and Greenbelt, Maryland, evaded the income tax in his 1998 and 1999 filings and filed a false return in 2000, according to the Federal Bureau of Investigation (FBI).
US District Judge Roger W. Titus Wednesday sentenced Srivastava, who was convicted by a federal jury on Oct 8, to 46 months in prison, followed by three years of supervised release.
United States Attorney Rod J. Rosenstein said, “Dr. Pradeep Srivastava’s prosecution should serve as an example for anyone who considers cheating on their taxes.”
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, prosecutors said.
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.
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 Programme over a three and a half year period.
