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HSBC's Indian banking unit is at the heart of fresh revelations around tax evasion, days after a global expose showed tax dodging through accounts in the British major's Swiss banking unit, a media report here said on Sunday.
It is alleged representatives of HSBC India, which has employees based in America, assured customers that details of their accounts would not be reported to tax officials. The latest revelations came even as the bank issued full-page advertisements in British newspapers as a public apology after reports that its Swiss banking arm had helped some wealthy clients avoid tax.
According to court documents seen by The Sunday Times, employees in one case allegedly advised a New Jersey Indian-origin businessman to transfer funds in tranches of under £6,500 to "stay below the radar". Court documents show HSBC India has been accused of helping American citizens of Indian-origin to avoid tax, the report said.
The US justice department issued a summons tothe bank in April 2011, to reveal details of clients.
"Prospective clients were told, as a foreign bank, HSBC India would not disclose the accounts to the IRS (Inland Revenue Service)," the government said in court filings.
"The IRS has learnt thousands of US taxpayers with accounts at HSBC India may have failed to disclose those accounts, and report income on them, as required by law," it said. The bank was said to have had 9,000 US residents of Indian origin but less than 1,400 had disclosed the existence of their accounts.
In a separate prosecution, unnamed HSBC India banking officials were alleged co-conspirators in the case of Arvind Ahuja, a neurosurgeon from Wisconsin, who allegedly hid 5.5 £million in secret offshore HSBC accounts and filed false tax returns.
It was alleged Ahuja and HSBC officials used "undeclared accounts in Jersey, India and other countries for the purpose of concealing income from the IRS".
Ahuja was fined £222,000 and ordered to serve three years probation.
