South San Francisco Resident Sentenced To Prison For Money Transmission And Tax Scheme
SAN FRANCISCO – Subhash Jay was sentenced today to 30 months in prison and ordered to pay restitution of $409,871 for operating an unlicensed money transmitting business and filing a false tax return announced United States Attorney Alex G. Tse, Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Tara Sullivan, Bureau of Industry and Security, Special Agent in Charge Joseph Whitehead, and Homeland Security Investigations Special Agent in Charge Ryan L. Spradlin. The sentence was handed down by the Honorable Charles R. Breyer, Senior United States District Judge.
Jay, 59, of South San Francisco, pleaded guilty to the charges on March 23, 2018. According to the plea agreement, Jay 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 with an aggregate value of at least $4,515,236. Jay then forwarded most of those funds to the client, but retained $817,734 as a commission. In addition, Jay willfully filed corporate tax returns for Force Services for the years 2010 through 2014, which failed to report the commissions as gross receipts, and 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, changing 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). Pursuant to his plea agreement, Jay pleaded guilty to one count of operating an unlicensed money transmitting business, and one count of filing false tax returns on March 23, 2018. The remaining counts were dismissed.
In addition to the prison term and restitution, Judge Breyer also ordered Jay to serve a three-year period of supervised release. Further, on July 11, 2018, Judge Breyer issue a forfeiture order in the amount of $4,515,236. Judge Breyer ordered the defendant to begin serving the sentence on December 12, 2018.
Assistant United States Attorney Michael G. Pitman is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation, Homeland Security Investigations and the Bureau of Industry and Security.