FOR IMMEDIATE RELEASE
February 14, 2012
CAMDEN, N.J. – Six men from southern New Jersey were arrested today for their alleged roles in a $9.6 million conspiracy to obtain contraband, untaxed cigarettes for sale – including out of three New Jersey retail locations, U.S. Attorney Fishman announced.
Each of the six defendants was arrested in Cumberland or Atlantic County, N.J., and is charged in a separate Complaint with conspiracy to obtain and sell contraband cigarettes: Melido Fortuna, 34, and his brother Jose Fortuna, 29, of Camden; Muhammad Shafique, 41, and his son, Kamran Khalid, 22, of Egg Harbor Township, N.J.; Wael Kasharmeh, 38, of Gibbstown, N.J.; and Mohammad Rafiq, 62, of Atlantic City, N.J. Shafique, Rafiq, and Khalid also are charged with conspiracy to commit money laundering for allegedly using criminal proceeds to make additional illegal purchases.
The defendants are expected to appear this evening before U.S. Magistrate Judge Joel Schneider in Camden federal court.
“According to the Complaint, the defendants used a business model that dodged millions in taxes at the expense of the public,” said U.S. Attorney Fishman. “In addition to potential prison terms, our seizing their alleged profits and investments – including the store one defendant bought with his illegal proceeds – makes sure their scheme doesn’t pay.”
“The trafficking in contraband tobacco is all about the greed from the enormous profits that can be made by engaging in such criminal activity,” said Matthew Horace, Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge, Newark Field Division. “This is a crime that affects local economies through the loss of state tax revenue and puts a massive burden on legitimate tobacco retailers. The Newark Field Division would like to thank our law enforcement and prosecution partners for their participation in this investigation and hope today’s operation will discourage future illegal tobacco diversion schemes.”
According to the Complaints unsealed today:
Prior to September 2010, law enforcement officers began investigating a cigarette smuggling operation in which defendants purchased contraband cigarettes – which did not bear the New Jersey State Cigarette Excise tax stamp or bore a counterfeit stamp – and resold them at a profit while avoiding state taxes of $27 per carton.
During the course of the investigation, which lasted from September 2010 until February 2012, the defendants purchased contraband cigarettes from a confidential informant and two undercover law enforcement officers. During that time, the defendants bought approximately 253,741 cartons of cigarettes for $9,680,197, resulting in a tax loss of approximately $6,851,655.
The defendants sold the contraband cigarettes to others for sale at retail stores, or sold them at various retail stores they owned and operated, including: Jose Fortuna’s Paulsboro Supermarket and Deli at 1100 North Delaware Avenue in Paulsboro, N.J.; Khasharmeh’s AMW Supermarket at 136 West Broadway in Salem, N.J.; and Safique’s Get & Go at 128 Main Street, Pleasantville, N.J. One of the undercover officers also saw employees of the Paulsboro store selling individual cigarettes outside a pack, which is against the law.
On separate occasions, Khasharmeh paid for cigarettes with a Mossberg pistol grip shotgun and a Chevrolet box truck. Shafique paid for cigarettes on one occasion with a Mercedes Benz.
Some of the money obtained from selling the cigarettes was used to purchase additional contraband cigarettes. Shafique, Rafiq and Khalid took some of the proceeds of selling cigarettes at the Get & Go and deposited them into a bank account in the name of the store, using that money to make additional illegal purchases. Shafique also purchased the Get & Go location using money from the cigarette sales.
The contraband cigarette conspiracy charge carries a maximum potential penalty of five years in prison. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison. Both charges also each carry a maximum fine of $250,000, or twice the gross gain or loss from the offense.
Additionally, the government seeks forfeiture of all property, real and personal, involved in the money laundering offense – including the Pleasantville Get & Go. Victims of crimes, including the state of New Jersey, may apply for remission of funds forfeited to the United States.
U.S. Attorney Fishman credited the ATF, under the direction of Special Agent in Charge Horace, with the investigation. He also thanked the New Jersey FBI, under the direction of Special Agent in Charge Michael B. Ward; the New Jersey Department of Treasury Division of Taxation Office of Criminal Investigation, under the direction of Special Agent in Charge Charles Giblin; and the New York State Department of Taxation and Finance Criminal Investigation Division, under the direction of Deputy Commissioner Richard Ernst, for their roles in the investigation. He also thanked Immigration and Customs Enforcement’s Homeland Security Investigations; the Cumberland County Prosecutor’s Office; and the Millville, Egg Harbor Township, Atlantic City and Bridgeton Police Departments for assisting with today’s arrests.
The government is represented by Assistant U.S. Attorneys Diana V. Carrig and Howard Wiener of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the Complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.