HSBC India Client Convicted of Hiding Accounts From IRS

Ashvin Desai, a client of HSBC Holdings Plc and the owner of a medical-device company in San Jose, California, was convicted of tax crimes relating to accounts in India valued at as much as $7.7 million.

Jurors in federal court in San Jose yesterday convicted Desai of all eight counts against him, including filing false tax returns, aiding in preparing false returns and failing to file Reports of Foreign Bank and Financial Accounts, or FBARs, according to court records. Desai owns Prosurg Inc., which makes devices for treating urological and gynecological disorders.

U.S. prosecutors have charged about 70 taxpayers and 30 bankers, lawyers and advisers in a five-year crackdown on offshore tax evasion. Several clients of London-based HSBC, the largest European bank, have been convicted, including surgeons from Virginia and Wisconsin, a New Jersey adult paraphernalia wholesaler, and a Boston venture capitalist.

Desai, of San Jose, was convicted of filing false returns for 2007, 2008 and 2009 that omitted interest income of as much as $471,324 in the first year on HSBC India accounts. He also helped his adult son and adult daughter file false returns, and failed to file FBARs for 2007 through 2009, the jury found.

He faces as long as 10 years in prison. U.S. District Judge Edward Davila set sentencing for Jan. 27.

Desai’s attorney, Martin Schainbaum, didn’t immediately return a call seeking comment on the verdict.

The case is U.S. v. Desai, 11-cr-00846, U.S. District Court, Northern District of California (San Jose).

Before it's here, it's on the Bloomberg Terminal. LEARN MORE