Morganville Pharmacy Owner Admits To $9M Tax Evasion

MORGANVILLE, NJ — The owner of a pharmacy in Old Bridge admitted Tuesday, March 5 to cashing millions of dollars’ worth of his pharmacy’s checks to evade the payment of income taxes, U.S. Attorney Craig Carpenito announced.

Ajay Barthwal, 43, owns Old Bridge Drugs & Surgicals (OBDS), a retail pharmacy on Perrine Road in Old Bridge. Barthwal, who lives in Morganville, pleaded guilty in Newark federal court Tuesday to one count of conspiracy to commit tax evasion. Federal prosecutors say he failed to report income on tax returns he filed during calendar years 2009 through 2011.

Federal investigators say Barthwal and his wife claimed to be each 50 percent owners of OBDS. However, Barthwal was actually a one-third owner in OBDS, and two other individuals, Dilip Naik and Bhavesh Mistry were each one-third owners and “silent partners.”

Both Naik and Mistry have previously pleaded guilty to tax-related crimes, federal prosecutors say.

As a partnership, OBDS 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 OBDS, Barthwal, Naik and Mistry each were responsible for accurately reporting to the IRS their business incomes 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. They did so by submitting to the IRS tax returns that substantially under-reported the gross receipts of OBDS for calendar years 2009 through 2011. Instead, they cashed income at a check cashing business in Jersey City.

Barthwal then deposited only a portion of the OBDS business receipts into the OBDS operating account. Barthwal, Naik and Mistry each received approximately one-third of the proceeds of the OBDS business receipts that were not deposited into the operating account.

The IRS says that Barthwal Naik and Mistry owed $4,114,102 in taxes on the money they hid.

Barthwal is facing 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. He was represented by Frank Agostino Esq. of Hackensack and will be sentenced in July.