April 15, 2024

Guilty Plea in Offshore Tax Evasion Case

The case includes as co-conspirators five unidentified bankers, who according to the indictment worked at a large international bank based in Britain .

The defendant, Vaibhav Dahake, admitted in United States District Court in New Jersey to conspiring to conceal accounts in India.

Mr. Dahake is an Indian native who became an American citizen in 2006 and now lives in Somerset, N.J.

The plea comes days after federal prosecutors said that an HSBC unit in India potentially helped thousands of Americans to dodge taxes. Prosecutors are expanding the government’s inquiry of offshore tax evaders and their banks.

“HSBC does not condone tax evasion and is cooperating with law enforcement in this matter,” an HSBC spokeswoman, Juanita Gutierrez, said.

Government lawyers cited Mr. Dahake in their request last week for permission to get information from HSBC about American residents who may be using HSBC India accounts to evade federal taxes.

“Dahake is not an isolated incident,” the government said in a court filing last week, which detailed solicitations by several HSBC bankers to clients with the promise of secrecy.

The government is requesting authority to serve a “John Doe” summons on the bank to obtain the names of an unknown number of individuals who may have engaged in tax fraud.

HSBC has been soliciting clients of Indian origin living outside India since at least 2002, through a unit called NRI Services, the court documents filed by the government last week said.

Prosecutors used the same John Doe summons strategy in their case against UBS, which ultimately settled government charges against it by paying $780 million and agreeing to hand over the names of nearly 5,000 clients to the United States.

UBS fought the government’s bid to gain clients’ names, but ultimately relented after prolonged diplomatic wrangling and resolution of an internal debate inside Switzerland about bank secrecy.

Several lawyers said HSBC might be more willing to cooperate with the government, in part because the bank is not bound by strict Swiss secrecy laws, and to protect themselves.

“There is a longstanding set of principles that guide the Justice Department in deciding whether to bring a criminal complaint versus a company, and one is cooperation,” said Scott D. Michel, a lawyer who counsels wealthy clients at Caplin Drysdale.

Article source: http://feeds.nytimes.com/click.phdo?i=d1749ea0fa5fea529ff34cf99baf678c

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