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Monmouth county, n.J., man admits to filing false personal income tax returns omitting swiss bank accounts



FOR IMMEDIATE RELEASE
March 21, 2013


 

TRENTON, N.J. - A Monmouth County, N.J., man today admitted filing false personal federal income tax returns, U.S. Attorney Paul J. Fishman announced.

Rakesh Chitkara, 60, of Marlboro, N.J., pleaded guilty today before U.S. District Judge Mary L. Cooper to Count Four of a five-count Information, charging him with making and subscribing to a 2007 federal income tax return to the IRS that he did not believe to be true.

According to documents filed in this case and statements made in court:

Chitkara admitted that he had a financial interest in at least two financial accounts at UBS AG in Zurich, Switzerland, and that he knowingly failed to disclose these accounts, and income from these accounts, on his personal tax returns for five years.

Citizens and residents of the United States who have an interest in, or signature or other authority over, a financial account in a foreign country at any time during the relevant tax year are required to so indicate on a U.S. Individual Income Tax Return, Form 1040, by checking “Yes” or “No” in the appropriate box on Schedule B, Part III - Foreign Accounts and Trusts.  Citizens and residents of the United States are also required to report any interest and dividend income, as well as capital gain income, earned from such accounts.

On April 20, 1989, Chitkara caused to be opened an account in his own name at UBS AG in Zurich, Switzerland. On Jan. 13, 2000, Chitkara opened an account at UBS (Bahamas) Ltd. in the name of GMX. GMX Industries Inc. was a corporation formed under the laws of the Commonwealth of the Bahamas that was utilized to conceal Chitkara’s beneficial ownership in one of his two UBS accounts. On Oct. 10, 2002, Chitkara caused to be opened an account at UBS AG in Zurich, Switzerland, in the name of GMX, which was intended to be the successor account of the GMX account opened at UBS (Bahamas) Ltd. Chitkara was the sole beneficial owner of the GMX accounts at UBS (Bahamas) Ltd. and at UBS AG in Zurich.

Chitkara admitted that for tax years 2004 through 2008, he failed to report income received by him in one or more accounts at UBS and failed to report that he had an interest in, or a signature or other authority over, the financial accounts in Switzerland when he knew he had received income in one or more of the Swiss bank accounts.

As part of his plea agreement, Chitkara must repay back taxes – which the government contends total approximately $27,000, in addition to a civil penalty of $839,885, for willfully failing to file Reports of Foreign Bank and Financial Accounts (“FBARs”) to the IRS.

The charge to which Chitkara pleaded guilty carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is currently scheduled for June 26, 2013.

U.S. Attorney Fishman credited special agents of the IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, with the investigation that resulted in today’s sentencing.

The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton and Trial Attorney Tino Lisella of the Justice Department’s Tax Division.

13-137                            

Defense counsel: Ian M. Comisky and Matthew D. Lee Esqs., Philadelphia

Chitkara, Rakesh Information

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