Indian American Entrepreneur to Pay $2.5 Million Fine for Hiding Income

An Indian American entrepreneur pleaded guilty on 7th January on the charges that he concealed from United States tax authorities nearly $7.9 million that he held secretly in secret bank accounts in India and Switzerland, and consented to pay $2.4 million penalty for not disclosing them.

The Indian American, Sanjay Sethi, 52, of Watching in Somerset County, New Jersey ,who owns SanVision Technology Inc, admitted to using corporations in the Cayman Islands and the British Virgin Islands to hide hundreds of thousands of money, which he held in different secret bank accounts in India and Switzerland. Sethi was pleaded guilty before United States District Judge named Jose L. Linares in Newark federal court to the charges of conspiracy to conceal assets in undeclared bank accounts from the IRS.

According to the Justice Department Sethi failed to file a Report of Financial Accounts with respect to his foreign accounts. Any United States citizens who have a financial account in a foreign country with assets in excess of $10,000 are needed to disclose the presence of such account according to Schedule B, Part III, of their individual returns on income tax. They must also file an FBAR with the United States Treasury showing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest.

In accord to the documents filed in this case and statements made in court, Sethi planned with bankers from the United Kingdom, United States, and Switzerland to conceal his assets and income derived from those assets. He made use of nominee and shell companies formed in tax jurisdictions to hide his ownership and control of assets from the IRS. Sethi and his co-conspirators made use of bank accounts in the name of nominees and shell companies, and filed false and fraudulent returns on tax with the IRS in order to conceal his ownership of the foreign accounts.

Due to the conspiracy to conceal assets Sethi has been proved guilty and punishable by a maximum potential sentence of five years in prison and a fine of $250,000. He has agreed to file true and accurate tax returns and to pay to the IRS all taxes and fines unsettled, along with the $2.4 million fine imposed for his failure to disclose the foreign accounts. The date of Sentencing has been scheduled for 18th April, in the year 2013.

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