NRI jailed for concealing money in India, UAE

NEW YORK: An Indian-American man has been sentenced to six months in prison for concealing more than 8 million dollars in bank accounts in India and UAE.

Ashvin Desai of San Jose was sentenced yesterday six months imprisonment and six months and one day of home confinement for hiding the money in foreign bank accounts, the Justice Department and Internal Revenue Service said.

Prior to the sentencing, Desai filed with the court a document indicating that the IRS has assessed and demanded payment of a penalty against him for USD 14 million.

A jury had convicted Desai, a medical device manufacturer, in October last year of failing to report his family's foreign bank accounts to the government on tax returns and other federal records.

The jury also found that Desai failed to disclose more than USD 1.2 million income generated through interest by these accounts between 2007 and 2009.

According to evidence presented in court, Desai controlled several foreign bank accounts at HSBC in India and Dubai, including accounts held in the name of his wife and children.

Desai invested the funds in these accounts in certificates of deposit, which earned interest at rates as high as 9 per cent.

Desai funded these accounts by mailing checks from the US and by transferring money from other undeclared bank accounts in Singapore and the UK to his family's accounts in India.

Desai also sold medical devices abroad and directed that his customer wire funds directly to his undeclared HSBC India account.

Between 2007 and 2009, Desai paid approximately USD 17,000 in taxes but he additionally owed over USD 300,000 in taxes to the IRS on his unreported interest income.

Desai's deposits into his foreign accounts also far exceeded the income he disclosed on his tax returns each year. In 2008, he deposited nearly USD 1.1 million into foreign accounts while only reporting income of about USD 1,15,000 on his tax return.

Evidence at trial also demonstrated the steps Desai took to conceal his family's foreign accounts from the government.

In addition to failing to report his accounts on tax returns, Desai also directed the bank not to mail bank statements to his house.

He once wrote an email in which he asked an HSBC banker: "Why are all the statements coming to Home address? I thought we had a different arrangement."