5-Hour Energy Drink Boss, Manoj Bhargava, Under Investigation For Fraud
India-West News Desk
FARMINGTON HILLS, MI – Manoj Bhargava, billionaire founder of 5-Hour Energy, transitioned from monkhood in India to a life of staggering wealth and philanthropy. Now, U.S. tax authorities say that his charitable efforts were sophisticated tax evasion tactics.
In the1970s, Bhargava, a Princeton dropout, moved to India seeking spiritual enlightenment, living for over a decade as a monk closely associated with the family of the late guru Hans Ram Singh Rawat. Returning to the U.S., he eventually invented the highly concentrated 5-Hour Energy shot, which became a national hit, particularly among long-haul drivers and college students. The success propelled Bhargava, now 71, to the Forbes billionaire list and led him to make extensive charitable contributions through entities linked to Rawat’s family.
Charitable Ventures
Bhargava committed to the “Giving Pledge,” vowing to donate most of his wealth to assist the poor. Following this vision, he invested in projects aimed at providing clean water and electricity in impoverished communities. However, the Internal Revenue Service asserts that Bhargava’s approach to these contributions and investments may contravene tax regulations, the Wall Street Journal reported.
One issue, WSJ said, stems from his transfer of a $624 million stake in 5-Hour Energy to a Michigan charity. The IRS claims Bhargava bought back this interest using a promissory note without fully relinquishing control, artificially inflating his tax deductions. Bhargava disputes these claims, asserting that his donations comply with all tax guidelines.
The IRS’s scrutiny also extends to Bhargava’s overseas dealings, particularly involving his use of Swiss bank accounts and assets managed by Indu Rawat, the guru’s daughter-in-law and head of his charitable activities. The IRS suspects Bhargava used Rawat as a figurehead to shield assets from U.S. taxation, a claim Bhargava’s spokesperson denied to the Wall Street Journal. Additionally, Senate Finance Committee Chairman Ron Wyden has called for an investigation, which, if pursued, could result in one of the largest tax penalty cases in U.S. history.
Investigation
Bhargava’s dedication to charity and public image as a philanthropist contrast with the complex web of financial arrangements U.S. authorities now scrutinize. His Michigan charity has provided millions for Indian healthcare, education, and employment initiatives. Yet, recent court filings reveal that in 2018, the IRS disqualified Bhargava’s tax deductions from his Michigan charity donations. Following this, a criminal investigation was launched, with a grand jury requesting over a decade of his financial records.
One of Bhargava’s principal banking partners, Geneva-based Pictet, was already under pressure from U.S. authorities investigating undisclosed offshore accounts. The bank complied, turning over documents that reportedly depict Bhargava as heavily involved in accounts nominally owned by others, such as Rawat. Bhargava is alleged to have moved millions into offshore structures, including a Bahamas investment fund that fueled film ventures for the Rawat family.
Vision
Apart from philanthropy, Bhargava has diversified into media and technology, briefly acquiring Sports Illustrated before losing the publishing rights amid a funding shortfall. In 2015, he produced a documentary, “Billions in Change,” to showcase inventions like bikes generating electricity for low-income families. Despite high hopes, these inventions proved impractical. Bhargava has since focused on developing more efficient water filtration systems named in honor of his guru.
Legacy
Bhargava’s trajectory— from monk to billionaire to target of IRS scrutiny—the Wall Street Journal said, highlights the complexities that often accompany philanthropy among the ultra-wealthy. Defending his giving model, Bhargava states his preference to aid the impoverished directly rather than allocate funds to “a rich government.” His spokesperson maintains that Bhargava’s philanthropic efforts are genuine and integral to his life’s work.
iyer
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Always figured when billionaires with noble intentions stash wealth in Swiss/Bahamas account(s) and then fly to Davos, Switzerland to attend some “climate change” conference, nothing more than to check their bank balances.
October 29, 2024