Silicon Valley Device Inventor Gets Prison Time
July 10, 2014
A San Jose-based medical device inventor named Ashvin Desai was sentenced to six months in prison and an additional six months of home confinement for tax fraud. The sentence was meted out by U.S. District Judge Edward J. Davila. The sole owner of medtech firm Prosurg, Desai had been indicted in 2011. Last year, he was found guilty of eight felony accounts filed against him and was assessed a penalty of $14,229,744.
Desai allegedly hid money in several bank accounts in India, England, and Dubai and neglected to disclose more than $1.2 million in interest earned by offshore bank accounts from 2007 to 2009. In that time frame, he paid $17,000 in taxes but the U.S. Department of Justice found that he owed an additional $357,783. In 2008, Desai sent more than $1 million to his offshore accounts while declaring on his tax return that he had earned $115,810.91.
According to the U.S. government, Desai had stashed more than $8 million in offshore bank accounts. Desai deposited money into the accounts by sending checks in the mail and by wiring payments between foreign bank accounts. The court records also note that Desai funneled hundreds of thousands of dollars of bank deposits through his adult children and wife.
By investing the money in the accounts through certificates of deposit, Desai was able to earned interest rates as high as 9%.
Desai had requested the offshore banks refrain from sending statements to his home address. When one bank failed to do so, Desai reportedly asked: "Why are all the statements coming to Home address? I thought we had a different arrangement."
Over the years, several customers with accounts held by HSBC India have faced similar charges. U.S. prosecutors have demanded that the bank supply potentially thousands of U.S. account names to assist in tax-evasion litigation.
Brian Buntz is the editor-in-chief of MPMN and Qmed. Follow him on Twitter at @brian_buntz.
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