Pharmacist admits cashing checks to avoid paying income taxes

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A licensed pharmacist from Marlboro has admitted cashing millions of dollars worth of his pharmacy’s checks to evade the payment of income taxes, U.S. Attorney Craig Carpenito announced on March 5.

Ajay Barthwal, 43, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with conspiracy to commit tax evasion in connection with income he received from Old Bridge Drugs and Surgicals, a retail pharmacy in Old Bridge, during calendar years 2009 through 2011, that he failed to report on the income tax returns he filed for those years.

According to documents filed in this case and statements made in court, Barthwal and his wife claimed to each be 50 percent owners of Old Bridge Drugs and Surgicals. However, Barthwal was actually a one-third owner 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, Old Bridge Drugs and Surgicals 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 Old Bridge Drugs and Surgicals, 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 Old Bridge Drugs and Surgicals had received, by submitting to the IRS tax returns that substantially under-reported the gross receipts of Old Bridge Drugs and Surgicals for calendar years 2009 through 2011.

Beginning in January 2009, Barthwal and Naik caused business receipts from Old Bridge Drugs and Surgicals to be cashed at a check cashier located in Jersey City. Barthwal then deposited only a portion of the Old Bridge Drugs and Surgicals business receipts into the business’s operating account, and Barthwal, Naik and Mistry each received approximately one-third of the proceeds of the Old Bridge Drugs and Surgicals 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 Old Bridge Drugs and Surgicals 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, according to documents filed in the case and statements made in court.

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.