WASHINGTON – Billionaire 5H energy entrepreneur Manoj Bhargava allegedly maintained undeclared bank accounts worth hundreds of millions of dollars at Swiss bank Pictet, according to documents filed by Senate Finance Committee Chairman Ron Wyden, D-Ore., in A managing partner of the bank in Geneva was quoted as saying in a letter sent on Wednesday.
The letter, which seeks information as part of an ongoing committee investigation, did not identify Bhargava by name, instead referring to him as “Person 1.” Bhargava was the account holder in question, according to a source familiar with the investigation and documents reviewed by CNBC.
Wyden says he obtained documents about an alleged scheme to avoid U.S. taxes on a personal estate based largely on the sale of tiny bottles of highly caffeinated liquid at retail outlets across the country.
“According to the documents reviewed by the Committee, Individual 1 has been a Pictet customer for at least fifteen years,” Wyden wrote.
The letter said that Individual 1’s account (which CNBC reports linked to Bhargava) received a $255 million deposit in 2013, but the account was later zeroed out at the end of the year .
Wyden contended that “the documents expressly indicate” that Individual 1 transferred the funds to a company in the Bahamas that was nominally owned by another individual identified as “Person 2.” However, despite the transfer, the funds allegedly remained under Bhargava’s control.
An attorney for Bhargava, Bryan C. Skarlatos, told CNBC he had no comment on the letter.
A sign stands in front of Banque Pictet & Cie SA in Geneva, Switzerland, on Friday, October 16, 2015.
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A spokesperson for Pictet referred to CNBC a statement from December when it reached a settlement with the Justice Department over its American customers. This statement said, among other things: “This resolution follows Pictet’s extensive cooperation with the US authorities in full compliance with Swiss law. The DOJ recognizes this significant support in the resolution agreement.”
The bank said it had turned over to the Justice Department information on 1,109 accounts and 1,236 names with total assets of nearly $9 billion.
The Wyden letter cited several indications that Bhargava (Person 1) allegedly controlled the funds nominally owned by Person 2.
- Person 1 received bank statements and correspondence at his business address relating to Pictet accounts that were nominally owned by Person 2 or his companies.
- Pictet’s bankers discussed Person 2’s accounts with Person 1’s representatives.
- Bankers visited Individual 1 twice a year to discuss business, even though his accounts officially had no balance.
As a result, Wyden wrote, the foreign bank account reports that Bhargava (Person 1) filed with the Internal Revenue Service did not accurately reflect his control over the Swiss accounts.
Americans are allowed to have foreign bank accounts, but they must file so-called FBAR forms disclosing the assets with the IRS and pay taxes accordingly. Bhargava was born in India but is a U.S. citizen and operates businesses in the Detroit suburbs.
Sen. Ron Wyden, D-Ore., wants to increase unemployment benefits by $600 a week.
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Bhargava founded 5 Hour Energy in 2003 and grew the product’s sales to $1 billion in less than a decade.
He is also a member of The Giving Pledge charity campaign, founded by billionaires Warren Buffett and Bill Gates. Members make a non-binding promise to donate the majority of their wealth to charity.
In an essay on the website The Giving Pledge, Bhargava stated that he plans to donate 90% of his wealth to charity.
“Serving others seems to be the only intelligent choice for using wealth,” he writes. “The other options, especially personal consumption, seem to be either useless or harmful.”
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Wyden wrote that the allegations against Bhargava (Person 1) and Person 2, if true, “could potentially result in the largest individual FBAR penalty in U.S. history.” The largest penalty paid to the IRS to date is $100 million.
Wyden’s letter states that the factual structure within the Swiss bank raises the question of whether Bhargava’s (Person 1) transactions with Person 2 were truly at arm’s length.
“Although Individual 1 was no longer officially listed as the account holder or had no signing authority over the funds he transferred to Individual 2’s accounts, Pictet continued to forward inquiries and documentation regarding the funds to Individual 1 and his advisors,” Wyden wrote .
The Senate Finance Committee also received “allegations” that in 2014, several of the bank’s internal lawyers and outside counsel advised Person 1 to make a voluntary disclosure regarding an account to the IRS, but Person 1 refused to do so .
Federal agents from the Department of Justice and the IRS Criminal Investigation Division began a criminal investigation into the matter, Wyden wrote.
It was not clear Thursday whether such an investigation was still open.
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2024-03-21 14:05:41
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