Foreign HSBC Bank Customer Avoids Jail: Given Three Years’ Probation

A Wisconsin neurosurgeon convicted of tax charges related to a HSBC bank accounts owned abroad that held $8.76 million was spared prison and ordered to serve three years’ probation, according to the Internal Revenue Service.

Arvind Ahuja was sentenced yesterday in federal court in Milwaukee, where he was convicted Aug. 23 of filing a false tax return and failing to file a Report of Foreign Bank and Financial Accounts, or FBAR. Prosecutors had asked the court to impose a prison term of 41 to 51 months.

At a weeklong trial, prosecutors said Ahuja transferred millions of dollars from the U.S. to undeclared accounts in India at HSBC. Ahuja earned $2.76 million in interest income on an HSBC India account that he did not report on his tax returns, prosecutors said in a Jan. 22 court filing. The account was valued at $8.76 million in 2009, the U.S. said.

In a crackdown on offshore tax evasion since 2008, the U.S. Justice Department has charged dozens of U.S. taxpayers as well as more than two dozen offshore bankers, lawyers and advisers. Ahuja was the first to go to trial (most others pled guilty due to the overwhelming evidence against them). While he was convicted of two counts, he was acquitted of five others.

Ahuja, a board-certified neurosurgeon, will be permitted to leave his home to work.

Compared to other tax evasion cases, the sentencing was relatively lenient given the maximum possible prison time.  Even more surprising is Dr. Ahuja’s ability to keep his professional license to practice medicine in light of the felony conviction. Most states’ laws allow State Licensing Boards to revoke or suspend professional licenses for the commission or conviction of a misdemeanor involving moral turpitude or a felony, whether or not related to the practice of medicine.

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