Ajay Barthwal (43), co-owner of Old Bridge Drugs & Surgicals a retail pharmacy in Old Bridge, NJ pleaded guilty today to charges of conspiracy to commit tax evasion.
Ajay Barthwal, a resident of Morganville, NJ was charged with one count of conspiracy to commit tax evasion in connection with income he received from Old Bridge Drugs & Surgicals (OBDS) during calendar years 2009 through 2011.
According to the court statements and documents:
Barthwal and his wife claimed to be each 50 percent owners of OBDS. However, Barthwal was actually a one-third owner in OBDS, and two other individuals, Dilip Naik and Bhavesh Mistry, both of whom have previously pleaded guilty to related tax crimes, were each one-third owners and “silent partners.”
As a partnership, OBDS was required to file an IRS Form 1065 U.S. Partnership Income Tax Return. Income received by the business would flow through to the individual partners’ Individual Income Tax Return, IRS Forms 1040. As owners of OBDS, Barthwal, Naik and Mistry each were responsible for accurately reporting to the IRS their business income and respective personal incomes.
Barthwal admitted that from at least Jan. 1, 2009, through Nov. 5, 2012, he, Naik and Mistry all agreed to evade paying income taxes. He admitted that he, Naik and Mistry agreed to hide taxable revenue of $9,343,234, which OBDS had received, by submitting to the IRS tax returns that substantially under-reported the gross receipts of OBDS for calendar years 2009 through 2011.
Beginning in January 2009, Barthwal and Naik caused business receipts from OBDS to be cashed at a check cashier located in Jersey City, New Jersey. Barthwal then deposited only a portion of the OBDS business receipts into the OBDS operating account, and Barthwal, Naik and Mistry each received approximately one-third of the proceeds of the OBDS business receipts that were not deposited into the operating account.
In early 2009, Barthwal, Naik and Mistry agreed to hide the undeposited gross cash receipts from OBDS from the IRS. Barthwal admitted that he, Naik and Mistry failed to pay $4,114,102 in taxes that would have been due and owing to the IRS.
The count of conspiracy to commit tax evasion is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss caused by the offense, whichever is greater. Sentencing is scheduled for July 7, 2019.
NJ Indians & Tax Fraud
Ajay Barthwal is the third New Jersey Indian to get into trouble with IRS in recent months.
Piscataway, NJ retail pharmacy co-owner Rao Desu and New Brunswick, NJ CPA Amit Govil are other New Jersey Indians who were charged or have pleaded guilty to tax evasion on October 16, 2018 and February 4, 2019 respectively.
Punishment for Tax Evasion
On the count of conspiracy to commit tax evasion, Ajay Barthwal faces a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss caused by the offense, whichever is greater.
Ajay Barthwal’s sentencing for tax evasion charges is scheduled for July 7, 2019.