General Crime

Ashvin Desai Receives Prison Sentence For Tax Fraud In San Jose

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A San Jose medical device inventor has been sentenced to six months in prison and six months and one day of home confinement for committing tax fraud, federal prosecutors said today.

Ashvin Desai received his sentence Monday after being found guilty last October of concealing more than $8 million in foreign bank accounts while failing to disclose more than $1.2 million in interest income generated by those accounts between 2007 and 2009.

Prior to the sentencing, Desai filed a document with the court showing that the IRS has demanded payment of a penalty against him of more than $14.2 million.

According to court evidence, Desai owned several foreign bank accounts, some earning interest rates as high as 9 percent. Desai funded the accounts by mailing checks abroad, transferring assets between foreign accounts and having customers wire him funds directly.

Desai paid $17,000 in taxes between 2007 and 2009, but according to the U.S. Department of Justice, an additional $357,783 in unreported income interest taxes was owed.

The Department of Justice also noted that Desai’s foreign deposits far exceeded the income disclosed on each year’s tax return. In 2008, he deposited almost $1.1 million abroad while reporting only $115,810.91 in income on his tax return.

Evidence in court also revealed that Desai deliberately instructed banks not to mail statements to his house, at one point asking an HSBC banker: “Why are all the statements coming to Home address? I thought we had a different arrangement.”

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