A $21 Million Cigarette Tax Stamp Fraud Investigation Results in 22 Arrests

eHezi Archives 9 Comments

WCDA_90918_tax 003 Operation Seized Over 150,000 Counterfeit Tax Stamps 

Multi-agency Effort Confiscated 14 rifles, a Pump Action shotgun, and 5 Suspected Explosive Devices

White Plains, NY — Westchester County District Attorney Janet DiFiore, New York State Taxation and Finance Acting Commissioner Jamie Woodward and Yonkers Police Commissioner Edmund Hartnett announced that a year long investigation utilizing a multi-agency, multi-jurisdiction undercover operation carried out by the New York State Office of Tax Enforcement, Yonkers Police Department, New York City Police Department and Westchester County District Attorney’s office in which sales and purchases of more than nine million unstamped cigarettes resulted in a twenty one million dollar New York State cigarette excise tax stamp fraud and 21 individuals being arrested.

Also uncovered in the course of the investigation, an individual was arrested in the possession of five suspected home made explosive devices, fourteen rifles, a pump action shotgun and thousands of rounds of ammunition. 

On multiple occasions the defendants spent over $16 million purchasing the unstamped cigarettes from undercover New York State Tax Investigators.  

The illegal purchases resulted in over $21 million of lost excise and sales tax revenue to New York State and New York City.  

The defendants, acting as middlemen, would then resell the unstamped cigarettes at a sizable profit to small businesses for individual sale. 

The investigation was based on information, developed from a Confidential Informant by the Office of Tax Enforcement of the New York State Taxation and Finance Department, that the defendant’s were looking to illegally purchase cigarettes on the black market.  

During the course of the investigation, the investigative team made contact with approximately 60 targets and represented they had access to unstamped cigarettes for sale.   

All of the subjects have purchased illegal cigarettes, never paying the $42.50 excise tax or the sales tax on the cigarette cartons and never reporting the purchases or sales to the State. They would routinely purchase hundreds of cartons of unstamped cigarettes at a time. 

Charged are: 

Ali M. Abadi (DOB 9/25/58) 211 W. 149th St., New York, New York

Ibrahim A. Ahmad  (DOB 8/1/67) 696 Rhinelander Ave.  Bronx, NY

Mohamed Ahmed (DOB 11/3/58) 673 Degraw Street, Brooklyn, NY     

Omar Nagib Ali (DOB 4/24/73) 419 50th St., Lindenhurst, NY     

Ibrahim Althnaibat (DOB 9/10/60) Willow Street, Yonkers, NY    

Jamil H. Alzokari (DOB 1/1/1969) 6706 11th Avenue, Brooklyn, NY      

Mohamed A. Benkhiyar (DOB 2/2/70) 918 Fulton St., Brooklyn, NY

Ahmad Aldabesheh (DOB 5/15/62) 252 Buttrick Avenue, Bronx, NY

Yin Sin Wu (DOB 12/18/82)  1132 South 10th Street, Philadelphia, PA

Obrero Barrio (DOB 10/8/57) No Address

Andre Ford (DOB 3/14/86) 189-02 64th Avenue, Fresh Meadows, NY

Ronald Everett (DOB 12/22/61) 128-14 140 St., Jamaica, NY   

Przaemyslw S. Holynski (DOB 11/25/72)192-20 64 Ave, Corona, NY   

Alou Keita (DOB 3/5/78) 996 Tinton Ave.,Bronx, NY

Mohamed Lemine Ould Sidi (DOB 6/23/70) 1023 Rev. James Ave., Bronx, NY

Henry Polanco (DOB 5/3/60) 1504 Sheridan Ave., Bronx, NY

Abdo Quhshi (DOB 5/3/62) 62 Richmond Terrace, Staten Island, NY     

Norman A. Saif (DOB 8/8/59) 16 Welcome Way, Hampton, VA

Mohamed O. Salick (DOB 1/3/76) No Address     

John Taveras (DOB 10/26/71) 30 Richman Plz., Bronx, NY

Ri Q. Wu (DOB 4/12/56) 1132 South 10th Street, Philadelphia, PA

The Felony charges that each may face can include:  

Criminal Tax Fraud in the First Degree, a class “B” Felony,

Criminal Tax Fraud in the Second Degree, a class “C” Felony,

Criminal Possession of a Forged Instrument, in the First Degree, a class “C” Felony,

Criminal Tax Fraud in the Third Degree, a class “D” Felony,

Possession or Transport of Thirty Thousand or more or Unlawfully Stamped Cigarettes for the Purpose of  Sale, a class “D” Felony a violation of New York State Tax Law,

Attempt to Evade or Defeat the Taxes Imposed by Article 20 of the Tax Law of the State of New York, a class “E” Felony,

Possession or Transport of Ten Thousand or more or Unlawfully Stamped Cigarettes for the Purpose of Sale, a class “E” Felony a violation of New York State Tax Law.

Individuals charged in this investigation, for the first time, will be under new enhanced New York State laws expressly targeting these tax crimes.  

Also charged is:  

Gary Burstell (DOB 11/06/56) 55 Lockwood Road, Cortlandt Manor, NY with one count of Criminal Possession of a Weapon in the Third Degree, a class “D” Felony.

Warrants were executed at various locations in the New York Metropolitan Area resulting in the closure of a fraudulent tax stamping operation being run out of a storage facility in the Bronx. 

New York State imposes an excise tax on cigarettes in the amount of $2.75 per pack of twenty cigarettes.  Additionally, New York City is permitted to impose an additional $1.50 per pack, bringing the total combined tax rate to $4.25.    

New York State collects the cigarette tax through the sale of tax stamps, which are sold to licensed New York State stamping agents. An agent must affix the stamps to packages of cigarettes in order for those packages to be sold in New York State.   

The stamping agent can then sell the cigarettes to wholesale or retail businesses. 

To circumvent the excise taxes, and earn more profit on cigarette sales, some cigarette dealers illegally purchase unstamped cigarettes from unauthorized sources.   

New York State Office of Tax Enforcement, Yonkers Police Department Intelligence Unit, New York City Police Department Intelligence Division, Westchester County Police Bomb Squad and Westchester County District Attorney’s office participated in various aspects of the investigation.  

Arraignments are pending. 

Burstell faces a maximum of seven years in state prison. 

The other defendants face a maximum of eight and one third to twenty five years in state prison. 

Assistant District Attorney Steven Vandervelden, Chief of the Organized Crime and Criminal Enterprise Bureau and Assistant District Attorney Michael Curti, of the Organized Crime and Criminal Enterprise Bureau, will prosecute the case.

   

eHeziA $21 Million Cigarette Tax Stamp Fraud Investigation Results in 22 Arrests

Comments 9

  1. Yonkers should be able to tax on another dollar a pack tax.It would help with their budget problems. Pretty soon cigarettes will not be available from the indians without being taxed.

  2. Maybe some of it was funneled to Al Q.
    Also important, it was the government that created this problem in the first place by raising cigarette taxes so high.
    The government, with its onerous taxes, created the black market in cigarettes, just like the Fed govt. created a black market with liquor during Prohibition many years ago.

Leave a Reply

This comment will be displayed anonymously. Your name and email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.