Jailed businessman Rupinder Singh Chahil attempts to hide himself from the camera outside the Auckland District Court in 2015. Photo / NZ Herald
Jailed businessman Rupinder Singh Chahil attempts to hide himself from the camera outside the Auckland District Court in 2015. Photo / NZ Herald
An Auckland restaurant boss who exploited migrant workers is appealing his latest prison sentence for a large-scale tax evasion and money laundering scheme.
Rupinder Singh Chahil, who started the Masala Indian restaurant chain and has been in the hospitality industry since 2000, was imprisoned for three years andtwo months and fined $50,000 by Justice Ian Gault in February.
He had pleaded guilty to 34 tax evasion charges and nine charges of money laundering on the second day of his trial last October.
At a hearing in Wellington this afternoon, Chahil's legal team of Nicolette Levy QC and Tony Bamford argued their client should've been granted further discounts after admitting the offending, which may have resulted in a home detention sentence.
Levy said a greater reduction in sentence should have been awarded for Chahil's guilty pleas, while a multi-million civil settlement had also prevented him from making full voluntary reparation payments.
The High Court civil settlement saw $8 million in property forfeited in 2017 by those involved in the Auckland restaurant chain.
The properties had been restrained as part of a $34m asset seizure, which included safe deposit boxes.
"We will never know if this appellant could have made full reparation," Levy said.
"This is not the money laundering outrage it appears to be."
The Queen's Counsel also said people across New Zealand aren't paying tax, much of which is going un-prosecuted.
"Unfortunately," quipped Justice Murray Gilbert.
But Auckland's Crown Solicitor Brian Dickey, who made his arguments via video link, said the offending was significant and displayed sophistication.
While the money laundering aspect began with Chahil quite literally handing bags of cash to an accountant, it was then sent around the world and washed through foreign exchange transactions and forex trading.
"A lot of money was involved but a lot of money was paid back," Levy argued with her final submission, which drew laughs from the bench of three judges.
Justice Gilbert, Justice Susan Thomas and Justice Rachel Dunningham have reserved their decision.
Chahil, with the assistance Joti Jain, controlled 17 Masala-related companies which operated some 13 restaurants. Jain, who was in a personal relationship with Chahil at the time of the offending, was also sentenced to home detention for the tax evasion scheme.
The couple concealed some $6.5m in primarily cash sales at the restaurants between April 2008 and April 2014.
Their offending saw - on a weekly basis - the managers of the restaurants told to collect cash takings, while Chahil and Jain sometimes took money directly from the tills themselves.
The pair would then instruct certain managers to write second sets of sales reports containing all but the cash sale figures and tell managers how much to deposit in the company accounts.
Chahil and Jain's plot caused the Masala related companies to file 115 GST returns which contained false or misleading sales figures and a GST tax shortfall of $702,667.
At least 55 reminder letters were also sent by the Inland Revenue Department (IRD) to the Masala companies.
In a failed appeal of her home detention sentence in October 2018, Jain argued that she was merely a "proxy" director and shareholder in the companies.
Joti Jain, pictured standing next to restaurant manager Rajwinder Grewal, during her sentencing in the Auckland District Court over immigration and exploitation offences in 2015. Photo / Dean Purcell
Between January 2012 and April 2013, the dirty proceeds of the tax scam were laundered by Chahil and Vijay Kumar Gupta, an accountant.
It is estimated at least $524,000 was involved in money laundering transactions during that period.
Gupta was also sentenced alongside Chahil in February to 10 months' home detention and ordered to pay $5000 in reparations after admitting nine money laundering charges.
Today, Dickey said Gupta could be described as the "architect" of the money laundering operation.
The Masala chain was also the scene of the exploitation and chronic underpayment of migrant workers.
In 2015, Jain was sentenced for her immigration and exploitation offending, which included 11 months' home detention, 220 hours of community work and a nearly $58,000 reparations payment.
Rajwinder Singh Grewal, who managed the Bucklands Beach Masala, was sentenced to four and a half month's home detention and ordered to pay almost $5000 reparations for immigration and exploitation crimes.
In 2016, Jain and Grewal were also found in contempt of court and fined after they failed to deliver documents to liquidators.
The systemic tax evasion and immigration-related offending was discovered during an investigation by IRD, Immigration NZ and the Department of Labour, which began in 2012.
The Crown has earlier referenced the "tremendous public cost of uncovering the offending", with the investigatory effort amounting to more than 11,600 hours of IRD time alone, while tax authorities in Australia and India were also contacted.
