Tax evasion by Masala restaurant chain included money laundering. Rupindar Singh Chahil was fined $50,000 and sentenced to three years two months imprisonment for tax evasion and money laundering; Vijay Kumar Gupta ten months home detention for money laundering.
Wholesale tax fraud was uncovered by an Inland Revenue audit of the Masala Group covering six tax years ending 2014. Cash sales were hidden. The High Court was told restaurant managers were ordered to keep a separate accounting record of cash sales, then later told the level of cash sales to be written back into the books so as to allay Inland Revenue suspicions. Cash held unbanked was picked up on a regular basis on instructions from Chahil, described by Inland Revenue as the ringleader. False GST returns were filed. Income tax returns were not filed. The overall GST tax shortfall was calculated at $702,667. The amount of income tax lost is not known, the High Court was told.
Inland Revenue put in over 11,600 hours of investigative time, including contact with tax authorities in Australia and India. Sentencing Chahil to imprisonment, Justice Gault described tax evasion as straight theft from the community. Evidence was given that Chahil has a previous conviction for immigration fraud. He co-ordinated an eight million dollar settlement with government when penalties for Masala’s tax evasion were recovered under the Criminal Proceeds (Recovery) Act. No Masala restaurant assets were forfeited, the court was told. Neither were any of Chahil’s personal assets.
Money laundering charges arose from attempts to cover up Masala’s tax evasion. Foreign exchange transactions transferring funds offshore and then back again were intended to muddy the money trail.
R. v. Chahil & Gupta – High Court (28.02.20)
20.039