South San Francisco Resident Pleads Guilty To Money Transmission And Tax Scheme
SAN FRANCISCO – Subhash Jay pleaded guilty today to operating an unlicensed money transmitting business and filing a false tax return announced Acting United States Attorney Alex G. Tse and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf. The plea was accepted by the Honorable Charles R. Breyer, United States District Judge, in San Francisco.
According to the plea agreement, Jay, 59, of South San Francisco admitted to operating a money transmitting business known as Force Services, Inc., without obtaining required state or federal licenses. Jay admitted that, during 2010 through 2014, he caused two domestic bank accounts held in the name of Force Services to receive international wire transfers on behalf of a client. The wire transfers had an aggregate value of at least $4,515,236. Jay forwarded most of those funds to the client, but retained $817,734 as commissions. Jay willfully filed corporate tax returns for Force Services for the years 2010 through 2014, which failed to report the commissions as gross receipts. Jay also willfully filed individual income tax returns for the years 2010 through 2014, which failed to report the commissions as income.
A federal grand jury indicted Jay on April 6, 2017, charging him with one count of operating an unlicensed money transmitting business, in violation of 18 U.S.C. § 1960; ten counts of filing false tax returns, in violation of 26 U.S.C. § 7206(1); one count of making false statements to a government agency, in violation of 18 U.S.C. § 1001(a)(2); and one count of structuring financial transactions to evade reporting requirements, in violation of 31 U.S.C. § 5324(a)(3). Today Jay pleaded guilty to one count of operating an unlicensed money transmitting business, and one count of filing false tax returns. Judge Breyer scheduled Jay’s sentencing hearing for July 18, 2018. Jay faces a maximum sentence of five years in prison and a fine of $250,000 for operating an unlicensed money transmitting business, and three years in prison and a fine of $250,000 for filing false tax returns. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorney Michael G. Pitman is prosecuting the case. The prosecution is the result of an investigation by the IRS-CI.