Mohanbhai Ramchandani, a 66-year-old Elmhurst custom tailor, will now face three years in prison as well as muti million dollar fine as a result of his efforts to defraud the govenment in a tax cheating scheme that went on for 10 years. Photo Courtesy IRS
The East Elmhurst man who established himself as a tailor to the stars may be sewing prison stripes for the next few years after being indicted for hiding millions of dollars in foreign bank accounts to evade paying sales tax from his thriving business, according to Attorney General Eric T. Schneiderman.
And in a strange twist, the AG’s report revealed that Mohanbhai Ramchandani, the operator of Mohan’s Custom Tailors in Manhattan, was found out in part to his pension for reporting figures according to his belief in numerology. The AG’s office said the figures reported did not add up as numbers that could have occurred by chance.
The self-made millionaire, who grew his Manhattan based tailor shop by catering to sports figures and hard to fit celebrities, has plead guilty to violating the US Treasury Department’s Foreign Bank and Financial Accounts Report law as well as filing false tax returns to conceal $3.2 million.
United States Attorney Lynch said, “Ramchandani not only grossly underreported his true income, he completely underestimated the tenacity of the IRS to ‘follow the money’.”
The 66-year-old tailor allegedly perpetrated a complex tax scheme over the last ten years and admitted he reported only $5,674,738 in retail sales on tax returns between September 2002 and June 2012, when in actuality the sales figures for that time period were near $30 million.
One aspect of his fraudulent transactions included sending American Express transactions to the Bank of India in Hong Kong to an account he held there. He transferred additional funds to other banks in India and Canada, utilizing an account in his son’s name as part of the elaborate cover-up.
Mohan has agreed to pay $5.5 million dollars in damages to settle civil claims that were first brought to light by a whistleblower under New York State’s False Claims Act, which was strengthened by amendments written by AG Schneiderman in 2010 when he served as a US Senator. The settlement is the first time the Act was used in resolving a tax case.
Among the tailor’s clients were Patrick Ewing, Dayll Strawberry and former NYC mayors, Rudy Giuliani and Ed Koch.
Ramchandani could face up to three years in prison.
By Patricia Adams
