The indictment said Vaibhav Dahake of New Jersey, maintained undeclared bank accounts in the British Virgin Islands and India from 2001 through 2010 and failed to report these to US Internal Revenue Service (IRS) on his federal income tax returns, it said.
Employees of an England-based bank helped Vaibhav hide his undeclared funds. While the indictment, returned in a New Jersey federal court, did not identify the bank by name, it said it "was one of the largest international banks in the world and was headquartered in England."
According to a Wall Street Journal report, a person familiar with the case said the bank was HSBC Holdings PLC.
Dahake, a principal of an IT business, was born in India and became a naturalised US citizen in 2006. "Those who attempt to hide their assets and income in offshore accounts, and those who aid them in doing so, by now should realise that no bank offering such services will be a safe haven from the IRS," US Acting Assistant Attorney General John DiCicco said in a statement.
Dahake's Indian accounts were maintained by the England-based bank. According to the indictment, the bank operated a US division called NRI Services, which marketed offshore banking services to US citizens of Indian descent.
Through the NRI service, the bank "encouraged US citizens to open undeclared bank accounts in India," the indictment said. In 2001, Dahake received an unsolicited letter from the bank advertising bank accounts in India that paid high interest rates.
Dahake later met with a banker, employed by the bank's New York office, who told him the advantages of opening a bank account in India were that no US forms were required, he did not have to provide a social security number and the account was not taxable in India.
One banker also allegedly told Dahake to deposit funds into the accounts in small amounts to "stay below the radar" since any transfers of more than USD 10000 is required to be reported to American customs officials. The indictment has also cited as unindicted co-conspirators five unidentified bankers: three Americans and two Indians in Mumbai.
Commenting on the report, an HSBC spokeswoman Juanita Gutierrez said, "HSBC does not condone tax evasion and fully supports the US efforts to promote appropriate payment of taxes by US taxpayers."
Dahake's lawyer Lawrence Horn said the indictment was "most regrettable". He added that "the timing of this indictment appears to be a clubbed invitation for American citizens with undisclosed accounts to apply for admission into the second initiative of the voluntary disclosure programme or risk prosecution once that bank eventually discloses his or her name to the IRS"
The count with which Dahake is charged carries a maximum potential penalty of five years in prison and a USD 250,000 fine.
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