A New Jersey client of HSBC Holdings PLC pleaded guilty to charges that he hid as much as US$4.7 million through Swiss and Indian accounts not declared to the US Internal Revenue Service (IRS).
Sanjay Sethi, 52, owner of SanVision Technology Inc, conspired with HSBC bankers in New York, London and Geneva to hide assets from the IRS, he said on Monday in a federal court in Newark, New Jersey. He will pay US$2.37 million for not reporting the foreign accounts.
“Sethi and his co-conspirators used nominee and shell companies formed in tax-haven jurisdictions and elsewhere to conceal the defendant’s ownership and control of assets and income from the IRS,” his charging document read.
London-based HSBC is one of at least 11 banks under investigation by US prosecutors probing offshore tax evasion. HSBC’s Swiss private bank gave lists of staff to aid the US probe, a spokesman said in April last year. Last month, HSBC agreed to pay a record US$1.92 billion to settle US money laundering probes.
Since 2009, at least 50 US clients of offshore banks and more than two dozen bankers, lawyers and advisers have been charged in a US crackdown on offshore tax evasion.
Sethi, of Watchung, New Jersey, is one of several HSBC clients charged with opening undeclared accounts through the bank’s non-resident Indian division, which were marketed to US citizens of Indian descent.
“He accepts full responsibility for what he did and he is happy to get this matter behind him,” said Sethi’s attorney, Amy Walsh of Kostelanetz & Fink LLP in New York.
New Jersey businessman Vaibhav Dahake pleaded guilty in April 2011 to conspiring with five HSBC bankers to hide his Indian accounts from the IRS. His plea came four days after a US judge in California allowed 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 US tax authorities.
In August last year, federal jurors convicted a Milwaukee neurosurgeon, Arvind Ahuja, of filing a false tax return and failing to file a Report of Foreign Bank and Financial Accounts, or FBAR, related to HSBC accounts in India.
Last year, Ashvin Desai, the owner of a medical device company, was indicted in federal court in San Jose, California, on charges that he filed a false tax return and failed to file FBARs related to HSBC accounts in India. He awaits trial.