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HSBC India Client Indicted by U.S. Over $8.7 Million Account

Sept. 28 (Bloomberg) --  A Wisconsin neurosurgeon was re- indicted by a U.S. grand jury on new charges that he failed to declare an HSBC Holdings Plc account in India valued in 2009 at $8.7 million.

Arvind Ahuja was indicted again by a federal grand jury in Milwaukee, where he was initially charged June 28 with concealing accounts from the Internal Revenue Service. The nine- count indictment added a charge that Ahuja conspired with two HSBC India bankers to defraud the IRS from 2006 to 2009.

The charges against Ahuja come amid a widening U.S. crackdown on offshore tax evasion that includes grand jury investigations of eight foreign banks. Prosecutors have filed criminal tax charges against more than three dozen former U.S. clients of UBS AG and Credit Suisse Group AG, Switzerland’s two biggest banks, and London-based HSBC, Europe’s biggest bank.

Ahuja took steps to hide his offshore accounts, according to the indictment made public today. In 2007, an HSBC India banker told a colleague that Ahuja “has requested that he does not want any kind of mail at his US or India address,” according to the indictment. “He wants a HOLD on all his accounts.”

Prosecutors said Ahuja failed to report more than $1.2 million in interest income, pay taxes due or file Reports of Foreign Bank and Financial Accounts, or FBARs.

In New Jersey a businessman Vaibhav Dahake pleaded guilty in April to conspiring with five HBSC bankers to hide his Indian accounts from the IRS. His plea came four days after a U.S. judge in California gave permission to the IRS to serve a so- called John Doe summons on HSBC for information about Americans who may have banked in India to hide accounts from U.S. tax authorities.

In both the Dahake and Ahuja cases, prosecutors said HSBC ran a U.S. division called NRI Services that marketed offshore banking services to U.S. citizens of Indian descent. Through NRI, HSBC India “encouraged U.S. citizens to open undeclared bank accounts in India,” according to the Ahuja indictment.

If convicted, Ahuja, who lives in Greendale, Wisconsin, faces as long as 10 years in prison on the FBAR charges, five years on conspiracy and three years on charges of filing false tax returns.

Read more at: Tax Times blog

 
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