Engineer and businessman Suresh Gajwani was charged in Florida on March 19 for allegedly submitting false documents to evade paying millions in federal taxes.
According to the U.S. Department of Justice, Gajwani’s company, Nimco II, generated more than $80 million between 2019 and 2022. To avoid paying taxes on those earnings, he allegedly carried out a fraudulent corporate restructuring in 2020. He told the federal government that the change had occurred a year earlier, allowing him to take advantage of a tax exemption available under Puerto Rico’s new Incentives Code, which includes Act 22, a program designed to attract wealthy investors to the island.
The information filed by federal prosecutors does not mention that in August 2020 — six months after obtaining benefits under Act 22 — Gajwani registered SGNG Foundation Corp. in Puerto Rico as a nonprofit. In 2022, the nonprofit received at least $150,000 in donations from resident investors, according to data obtained by the Centro de Periodismo Investigativo (CPI) through a public records lawsuit against the Department of Economic Development and Commerce (DDEC).
As of press time, Gajwani had not responded to requests for comment or questions about whether the foundation distributed the donated funds in Puerto Rico.
According to the CPI’s findings, SGNG Foundation received these donations even though it was not included on the Department of Treasury’s list of tax-exempt nonprofits under Section 1101 of the Internal Revenue Code, nor was it listed by the Special Joint Commission on Legislative Funds for Community Impact — as required under the Incentives Code. In 2022, the foundation was among the 12 nonprofit organizations that received the highest amounts in donations from resident investors.
That year, SGNG Foundation’s federal tax return reported $35,700 in contributions, with less than half — $14,700 — donated to organizations in Puerto Rico.
The CPI asked the DDEC what action, if any, it had taken against Gajwani or his foundation following the charges. The agency did not respond by press time.
Annual donations to Puerto Rico-based nonprofits — ranging from $5,000 to $10,000, depending on the year of each investor decree — are one of the few requirements of the resident investor program. In return, beneficiaries receive a 100% tax exemption on passive income, including capital gains, dividends, and interest.
In August 2024, the CPI revealed irregularities surrounding these donations, including nonprofits that received funds without being certified as tax-exempt by the Treasury Department, as well as government failures to properly monitor compliance with donation requirements.
Although SGNG Foundation is registered in Puerto Rico, its 2022 federal tax return listed an address in California.
Gajwani registered the foundation in August 2020, stating its mission was “the uplifting of girls and women against negative bias they face in family, community, society, and the corporate world” across the United States, Puerto Rico, India, and other parts of the planet.
In October 2023, a year after receiving $150,000 in donations from beneficiaries of the new Incentives Code in Puerto Rico, the Department of State warned that the foundation would be dissolved for failing to file its annual report and pay the required fees. SGNG Foundation, which listed Gajwani and his wife, Nilam Gajwani, as principal officers, was formally revoked in December 2023.
Another corporate document reviewed by the CPI identified several educational institutions in India funded by the Gajwanis. The website of one of those institutions — a nursing school — claimed in a biography of Gajwani that a group of its students “are currently teaching more than 600 students on-line in Puerto Rico Public Schools.”
That information was removed after the CPI contacted Gajwani for comment.
The CPI also asked Puerto Rico’s Department of Education to confirm whether the educational activities described on the website took place but received no response.
Gajwani Claimed He Received Faulty Legal Advice
According to the information filed by federal prosecutors, Nimco II invested in Tesla stock starting in 2019, generating “tens of millions of dollars” in profits. That same year, Gajwani began exploring Puerto Rico’s tax incentives under Act 60. To secure a tax decree, he sought advice from an accountant and an attorney.
The information alleges that the accountant recommended corporate changes to help Gajwani qualify for the program. Later, the attorney reportedly assured Gajwani that his company’s profits — including those earned before he became a resident investor — would be exempt from federal taxes under Act 60.
“Internal Revenue Service (IRS) senior representatives later advised Attorney 1 that both positions in his opinion letter were wrong,” according to the “information” — a type of legal filing like an indictment but not issued by a grand jury. The document does not name the accountant or attorney, although it notes that the accountant’s office is in Florida.
Gajwani became a resident investor in January 2020. In October of that year, he donated $1,000 to former Puerto Rico Governor Pedro Pierluisi’s campaign committee, according to Office of the Electoral Comptroller records.
After obtaining his tax decree from the DDEC, Gajwani submitted a “reasonable cause statement” to the IRS requesting that the corporate restructuring that his accountant recommended be applied retroactively to January 2019. According to the information, the accountant had told Gajwani it was “unlikely” the IRS would scrutinize the filing.
“Between 2019 and 2022, Nimco realized net capital gains totaling approximately $80 million and distributed a corresponding amount to its shareholders. As a result of the improper conversion of Nimco, Suresh Gajwani did not pay taxes due and owing on the capital gains realized,” federal prosecutors stated.
This case adds to a growing list of Act 22 beneficiaries who have faced legal trouble, including charges related to financial crimes.
This translation was generated with the assistance of AI and thoroughly reviewed by our editorial team to ensure accuracy and clarity.
