THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, August 25, 1995 TAG: 9508250650
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY JOE JACKSON AND MARIE JOYCE, STAFF WRITERS
DATELINE: NORFOLK LENGTH: Long : 108 lines
A federal grand jury on Thursday indicted a Chesapeake physician on charges of tax fraud that include misclassifying a red Ferrari sports car as an ultrasound machine, then deducting it as a business expense on his taxes.
Dr. Javaid A. Perwaiz, an obstetrician and gynecologist with two offices in Chesapeake, was charged with six counts of signing and filing false tax returns in 1988 and 1989. He faces a maximum sentence of 18 years in prison.
The indictment said Perwaiz classified several personal purchases during those years as business expenses. The claims were then listed as deductions on his corporate tax returns.
The false claims totaled more than $158,300, the indictment said. The investigation by the IRS started in late 1992 as the result of a tax audit, federal officials said Thursday.
Perwaiz is president-elect of the obstetrical staff at Chesapeake General Hospital, said his attorney, Stephen Swain.
Swain said Perwaiz is innocent of the charges.
``Dr. Perwaiz is a well-respected and hard-working doctor who has spent hundreds of hours delivering babies,'' he said. ``He doesn't have the time to spend with day-to-day business expenses.
``Mistakes have been made by others that he has signed off on. Unfortunately, he should have looked more carefully at the tax returns.''
According to the indictment, the false claims included:
The purchase of a red 1989 Ferrari 328 in February 1989 for $89,942. Perwaiz made a $5,000 down payment, then paid the balance with corporate funds. He claimed the $84,942 was for an ultrasound machine and other medical equipment, the indictment said.
The purchase of a 1986 Mercedes Benz 560SL sports car in August 1988 for $26,120. Thisexpense was claimed as payment of ``business malpractice insurance,'' the indictment said.
Withdrawing $11,496 in August 1988 to pay off a loan for his office at 109 Wimbledon Square, then deducting it as an insurance expense on his taxes.
Using two cashier's checks, for $27,919 and $7,852, to pay legal fees and court costs in August 1988 for the settlement in a civil judgment against him for defaulting on a loan. These amounts were deducted as insurance expenses, the indictment said.
The indictment added that Perwaiz ``also purchased with corporate funds a number of items, including . . . expensive Oriental rugs, china, porcelain fixtures, jewelry, furniture, stereo equipment, paintings, drapes and clothes, including lingerie, shoes, suits, ties and dresses, which he classified as business items.''
Swain said the charges were the result of ``overzealousness on the part of the IRS . . . who were presented with the opportunity to prosecute a highly respected physician,'' Swain said. He added that all the business expenses were legitimate.
Concerning the purchases of the automobiles, Swain said: ``People use automobiles and various vehicles in business all the time.''
According to Swain, Perwaiz came to America from Pakistan more than 20 years ago. Most of his family still lives there, and Perwaiz ``does a great deal to support them,'' Swain said.
Perwaiz got his degree from Nishtar Medical School in Multan, Pakistan, according to the American Medical Association. He is licensed to practice in West Virginia, Georgia, New York and Washington, D.C.
Perwaiz has been licensed in Virginia since 1980 and was certified in obstetrics and gynecology in 1982, according to the American Board of Medical Specialties.
According to the indictment, he owned a residence in Portsmouth and one in Chesapeake. His individual tax returns for 1988 and 1989 showed a 6.8 percent increase in taxable income, from $277,779 to $296,787.
Then, in a 1990 form filed in 1992, his taxable income jumped to $727,181 - a 145 percent increase. The IRS began their investigation the same year.
Perwaiz has had other problems before Thursday's indictment, state records and news reports show.
In 1983, Perwaiz's right to admit patients to Maryview Medical Center in Portsmouth was withdrawn. According to records from the State Board of Medicine, Perwaiz lost his hospital privileges ``due to poor clinical judgment, unnecessary surgery, lack of documentation and discrepancies in record-keeping.''
Maryview officials later alleged, in state records, that Perwaiz performed hysterectomies on 11 patients ``contrary to sound medical judgment.''
But when the board heard complaints against Perwaiz in July 1984, a three-member panel decided not to discipline the doctor for those surgeries.
Instead, Perwaiz was censured by the board for lack of documentation in patient records and ``lack of judgment'' in regard to a sexual relationship with a patient, state records show.
A censure is one of the mildest forms of discipline the board may take. ILLUSTRATION: An indictment alleged that Dr. Javaid A. Perwaiz bought personal
items and claimed them as business expenses.
AMOUNT ITEM CLASSIFICATION
$84,942.83 Ferrari 328 business; ultrasound hystroscope,
colposcope
$26,120.65 Mercedes 560L business malpractice insurance and
tail coverage
$11,496.89 office business malpractice insurance and
tail coverage
$27,919.16 personal
judgement business malpractice
insurance and tail
coverage
$7,852.76 fees and
court costs
personal judgement business
insurance
TOTAL: $158,343.39
KEYWORDS: TAX FRAUD INDICTMENT by CNB