Indian-origin man pharmacist guilty in $4 mn US tax fraud

An Indian-origin pharmacist has pleaded guilty to cashing millions of dollars' worth of his pharmacy's cheques to evade the payment of income taxes totalling about USD four million and now faces a maximum sentence of five years in jail, according to a federal prosecutor.

Ajay Barthwal, 43, of New Jersey pleaded guilty before US District Judge William Martini in Newark federal court to an information charging him with conspiracy to commit tax evasion in connection with income he received from a retail pharmacy in the state's Old Bridge city during calendar years 2009 through 2011 and that he failed to report on the income tax returns he filed for those years.

 

In early 2009, Barthwal, Naik and Mistry agreed to hide the undeposited gross cash receipts from the Internal Revenue Service (IRS).

Barthwal admitted that all of us failed to pay over USD four million dollars in taxes that would have been due and owing to the IRS.

Barthwal faces a maximum of five years in prison and a fine of USD 250,000 when sentenced in July.

According to documents filed in this case and statements made in court, Barthwal and his wife claimed to be each 50 per cent owners of the retail pharmacy.

However, Barthwal was actually a one-third owner and two other individuals, Dilip Naik and Bhavesh Mistry, both of whom have previously pleaded guilty to related tax crimes, were each one-third owners and "silent partners."

Barthwal admitted that from at least January 2009, through November 2012, all agreed to evade paying income taxes.

He admitted that all of us agreed to hide taxable revenue of over USD 9 million which the retail pharmacy had received, by submitting to the IRS tax returns that substantially under-reported the gross receipts for calendar years 2009 through 2011.

Beginning in January 2009, Barthwal and Naik caused business receipts from the pharmacy to be cashed at a cheque cashier located in Jersey City.

Barthwal then deposited only a portion of the pharmacy's business receipts into its operating account, and Barthwal, Naik and Mistry each received approximately one-third of the proceeds of the business receipts that were not deposited into the operating account.