June 29, 11

NEWS / HSBC India Client Indicted for Filing False Tax Returns and Failing to Report Foreign Bank Account

WASHINGTON – Dr. Arvind Ahuja of Greendale, Wis., was indicted today by a federal grand jury in Milwaukee on four counts of willfully filing materially false tax returns and four counts of failing to file Reports of Foreign Bank and Financial Accounts (FBARs), the Department of Justice and Internal Revenue Service (IRS) announced.



According to the indictment, Dr. Ahuja, a board-certified neurosurgeon, wire transferred and maintained millions of dollars in bank accounts in India and the Bailiwick of Jersey at The Hongkong and Shanghai Banking Corporation Ltd. (HSBC). In 2009, the HSBC bank account in India had a balance of $8,733,785. The indictment alleges that Dr. Ahuja failed to report these bank accounts to the IRS on his 2006-2009 tax returns. The indictment further alleges that Dr. Ahuja failed to report more than $1.2 million in interest income that he earned from his HSBC India account and failed to pay the taxes due on that income. For the 2006-2009 tax years, Dr. Ahuja also failed to file FBARs to report his foreign bank accounts to the Department of the Treasury.



As alleged in the indictment, U.S. citizens had an obligation to report to the IRS on Schedule B of their U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign county in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. They further had an obligation to report all income earned from foreign financial accounts on the tax return and to pay the taxes due on that income. Separately, U.S. citizens with a financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year, must also file an FBAR form with the Department of the Treasury disclosing such an account by June 30 of the following year.



Each false tax return charge carries a maximum penalty of three years in prison and a $250,000 fine. The failure to file FBAR charges each carry a maximum penalty of 10 years in prison and a $500,000 fine.



A trial date has not yet been set. An indictment is merely an allegation, and Dr. Ahuja is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.



This case is being prosecuted by Senior Litigation Counsel John E. Sullivan and Trial Attorney Melissa S. Siskind, with the assistance of Assistant U.S. Attorney Tracy Johnson from the Eastern District of Wisconsin, and was investigated with the assistance of the IRS.



More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .

http://www.justice.gov/opa/pr/2011/June/11-tax-851.html

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