Indian-American businessman charged of concealing bank accounts in India and BVI

An American businessman of Indian origin, Vaibhav Dahake, has been charged by a federal grand jury of New Jersey of trying to conceal undeclared bank accounts in India and in the jurisdiction of the British Virgin Islands.

According to the indictment filed in federal court, in the period from 2001 through 2010 the businessman maintained undeclared bank accounts in the British Virgin Islands and India that he failed to report on his federal income tax returns. India-located accounts were maintained at a large international bank, headquartered in England. The bank was not identified by the name in the indictment, but some sources say it is HSBC Holdings PLC.

It is alleged that in 2001 Dahake received an unsolicited letter from the bank, advertising bank accounts in India that paid high interest rates. Then the banker from the bank’s New York office advised Dahake that one of the advantages of opening bank account in India was that he would not have to supply the bank with his social security number. After he decided to open an account in India, this banker advised him not to send one large check but to send five checks, each of them US$10,000 worth, for conspiracy purposes. In 2003 and 2004, additional funds were transferred by the businessman from the British Virgin Islands to his undeclared bank account in India. In connection with these wire transfers, the second banker employed by the international bank in New York advised Dahake that he could conceal his undeclared accounts by converting funds from USD to either British pounds or euros before wire transfer. Then, the third banker advised him on how to conceal the repatriation of funds from India to the United States. There were also other consultations with the banker.

The count with which the businessman is charged carries a maximum potential penalty – a US$250,000 fine and five years of imprisonment.

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