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Another Local New Jersey client of HSBC India Pleads Guilty
A local New Jersey client of HSBC Holdings Plc (HSBA) last month pleaded guilty to evading taxes on $1.2 million in income and using an account in India to hide some of his money. This is at least the second guilty plea by a New Jersey defendant with an HSBC India account in 2013.
Sameer Gupta, 33, who co-owns a wholesale adult paraphernalia business in New York, entered his plea yesterday in federal court in Newark, New Jersey.
Gupta, of Edison, New Jersey, admitted that from 2006 to 2009, he diverted receipts from the business, J.S. Marketers, and used a false invoicing scheme to cheat the Internal Revenue Service. Gupta admitted that he diverted receipts into 17 bank accounts, including six at HSBC India.
Gupta is a 50 percent owner of J.S. Marketers Inc., which sold adult paraphernalia to large adult-store chains and smaller retail video stores and bodegas. From 2006 through 2009, Gupta diverted $822,916 of J.S. Marketer business receipts into 17 different personal bank accounts held in the names of various individuals, including himself, his wife, identified only as “A.G.,” and his daughter, identified as “D.G.” He directed more than $250,000 of those diverted funds into six different accounts held offshore at a branch of HSBC in India. From 2007 through 2009, Gupta caused 22 J.S. Marketers corporate checks to be made payable to himself, or his father, identified as “J.G.,” in amounts identical to invoices from J.S. Marketers’ suppliers. Gupta endorsed those checks, which totaled $375,138, and deposited them into bank accounts that he controlled. Gupta filed individual income tax returns for the years 2006 through 2009 that did not report his income arising from the diverted J.S. Marketers funds.
Gupta evaded taxes on $1,198,054 in income for 2006 through 2009. He also failed to file Reports of Foreign Bank and Financial Accounts, (FBARs), for 2005 through 2008. As part of his plea agreement, Gupta has agreed to pay a one-time FBAR penalty of $259,045. The tax loss resulting from Gupta’s conduct is greater than $200,000 but less than $400,000.
Gupta faces a maximum sentence of five years in prison and a fine of $250,000 or twice his gain from the offense, together with the costs of prosecution. Gupta agreed to file true and accurate tax returns and to pay to the IRS all taxes and penalties owed, in addition to the $259,045 penalty imposed for his failure to disclose the foreign accounts. Judge Shwartz scheduled sentencing for June 13, 2013, before U.S. District Court Judge Faith Hochberg.
Gupta faces as many as five years in prison. He agreed to pay back taxes and penalties, as well as a $259,045 penalty for failing to file Reports of Foreign Bank and Financial Accounts, or FBARs.
HSBC’s Geneva-based private bank is one of at least 11 Swiss firms under investigation by U.S. prosecutors investigating offshore tax evasion. HSBC’s Swiss unit gave lists of employees to aid the U.S. probe, a spokesman said in April. Since 2009, at least 84 people have been charged with tax crimes by the U.S., including two dozen offshore bankers, lawyers and advisers. Several HSBC clients were charged. More than 38,000 Americans avoided prosecution by entering the IRS amnesty program (OVDI/OVDP) in which they paid back taxes and penalties while disclosing the banks and bankers who helped them hide offshore accounts.
Patel Law Offices has consulted with hundreds of clients regarding their offshore asset compliance issues. Patel Law Offices is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems. Our firm assists (and defends) clients and their advisors to legally disclose (and legitimize) foreign accounts.