Former Auburn Professor Indicted on Tax and Foreign Account Charges in Alabama

On January 14, 2025, a federal grand jury in Alabama indicted Foster Dai, a dual citizen of the United States and China, on charges of filing false tax returns and failing to report foreign bank accounts, as required by law.

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Potential Penalties Ongoing Legal Process

The indictment, originally issued on September 10, 2024, was recently unsealed and announced by Acting U.S. Attorney Kevin Davidson, along with Special Agent in Charge Demetrius Hardeman of the IRS Criminal Investigation Atlanta Field Office and Special Agent in Charge Paul Brown of the FBI’s Mobile Field Office.

Dai, aged 60, previously worked as a professor in the Electrical Engineering Department at Auburn University in Alabama.

He also served as a corporate executive officer for Shenzhen NRT, Co., Ltd., a company based in China.

The indictment alleges that during his tenure as an executive, Dai utilized foreign accounts with China Merchants Bank and the Industrial & Commercial Bank of China (ICBC) to receive payments from multiple entities in China.

However, he is accused of failing to report this foreign income on his federal tax returns for the tax years 2018, 2019, and 2020.

In addition to tax fraud allegations, Dai is charged with violating federal laws related to the disclosure of foreign bank accounts.

According to U.S. law, any citizen or resident with financial interests in, or authority over, foreign bank accounts exceeding $10,000 during a calendar year must file a Report of Foreign Bank and Financial Accounts (FBAR) with the U.S. Treasury.

The indictment claims that Dai neglected to file the required FBAR reports for at least two foreign accounts:

One account held with Industrial & Commercial Bank of China in 2018.
Another account with China Merchants Bank in 2020.

Potential Penalties

If convicted, Dai faces severe consequences. The maximum penalty includes:

A prison sentence of up to five years for each count of tax fraud or FBAR violation.
A fine of up to $250,000.

It’s important to note that an indictment is merely an allegation, and Dai is presumed innocent until proven guilty in a court of law.

Sentencing, if he is convicted, will be determined by a federal district court judge based on U.S. Sentencing Guidelines and other statutory factors.

Ongoing Legal Process

The case highlights the importance of compliance with U.S. tax laws, especially for individuals with significant ties to foreign entities and financial institutions.

Federal authorities, including the IRS and FBI, remain committed to holding individuals accountable for financial crimes.

As the legal proceedings unfold, this case serves as a reminder of the serious legal obligations U.S. citizens and residents have in reporting foreign income and financial assets.