Restauranteur jailed for money laundering in Auckland

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Wellington, February 28, 2020

A co-owner of the Masala Restaurant chain has been jailed for hiding millions of dollars in cash sales and laundering large amounts of it.

Rupinder Singh Chahil was sentenced today at the Auckland High Court to three years and two months in prison, plus a $50,000 fine, on nine money laundering charges and 34 tax evasion charges.

Vijay Kumar Gupta, an accountant, was also sentenced today to 10 months home detention and ordered to pay $5,000 in reparations.

Massive Scale

Inland Revenue Spokesman Tony Morrison says the evasion wasn’t particularly sophisticated but was carried out on a massive scale.

“Chahil provided 114 individual GST returns to Inland Revenue on behalf of the Masala Related Companies, which together concealed more than $6.5 million of mainly cash sales. The tax offending was linked inescapably to the money laundering but the money laundering was far more complex, involving multiple bank accounts here and overseas.

“Chahil and another co-owner, Joti Jain, collected cash from the Masala Restaurants, and delivered the money to Gupta to be laundered.

“Gupta controlled the deposit of large amounts of cash into bank accounts, transferred the cash to overseas banks, purchased large amounts of foreign currency, and then brought the money back to New Zealand,” Mr Morris said.

The tax offending spanned six years, from April 2008 to April 2014 through regular, two-monthly false returns to IR. The money laundering took place over 14 months through a series of transactions from 15 February 2012 to April 2013.

Tax evasion hurts

Mr Morris said that tax evasion hurts everyone because taxes are what fund essential items like hospitals, schools, and national parks.

“On a more basic level, tax evasion allows unscrupulous people to get a leg up over their competitors. Hiding their cash sales, and laundering the proceeds of their offending, meant the Masala Restaurants were inevitably able to undercut other restaurants.

“The tax evasion and money laundering were uncovered at a tremendous public cost. It required a substantial effort to detect, uncover and prosecute this case.

“The investigation took longer than it should have because Chahil had false responses prepared to deliberately frustrate the enquiries. IR’s investigation into the money laundering meant contacting tax authorities in Australia and India where he and Gupta tried to hide their criminal proceeds.

Financial loss to society

“The offending itself caused significant financial loss to society. The money laundering was designed to hide the tax evasion and allow Chahil to enjoy the fruits of his crime at society’s expense,” Mr Morris said.

Joti Jain, who was a former co-owner of the companies running the Masala chain, pleaded guilty to 21 charges of tax evasion and was sentenced to nine months home detention in 2018.

Gupta pleaded guilty to nine charges of money laundering along with Chahil who also pleaded guilty to 34 charges of tax evasion in October.

Chahil previously had imposed and served a sentence of Home Detention for charges relating to providing false or misleading information to Immigration New Zealand.

Source: Inland Revenue Department, Wellington.

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