Two Edmond Men Plead Guilty and Are Sentenced for Credit Card
“Bust Out” Scheme and Trafficking in Contraband Tobacco
Third Defendant Remains a Fugitive
Oklahoma City, Oklahoma – Last Friday, KHAWER SAEED GHILL (aka "Sajjan Gill"), 42, residing at times in Edmond, Oklahoma, and ASMAT ULLAH (aka "Uncle"), 62, a resident of Edmond, Oklahoma, have pled guilty and were sentenced in case involving a single 59-count indictment that was unsealed in April of 2012, charging Ghill, Ullah, and AHSAN ULLAH (aka "Ibrahim Khan" and "Shawn Ullah"), 41, currently a fugitive, with conspiracy, trafficking in untaxed cigarettes, bank fraud, and money laundering involving two primary schemes -- a credit card "bust out" scheme and a separate scheme involving trafficking in untaxed contraband cigarettes, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Ghill was sentenced to serve 72 months in prison and Asmat Ullah was sentenced to serve probation for five years. Both will have their restitution determined at a later date.
"Distribution of contraband tobacco hurts local economies through the loss of state tax revenue and puts an unfair burden on legitimate tobacco retailers," said U.S. Attorney Sanford C. Coats. "I commend all of the federal and state law enforcement agencies who worked diligently on this long-term, collaborative investigation. I would specifically like to thank the Oklahoma Tax Commission and Executive Director Tony Mastin for their assistance and cooperation during the investigation."
The two alleged schemes in this case were as follows:
Scheme 1: Credit Card “Bust-Out” Scheme (Charging Ghill and Ahsan Ullah)
It is alleged that from March 2003, through April 2007, Ghill and Ahsan Ullah conspired to defraud financial institutions and commercial businesses by obtaining fraudulent loans with no intention to repay the loans. Further, it is alleged that these defendants obtained money and property from various credit card issuers, including banks, credit unions, credit card companies, and retail stores through credit card “bust-out” activity with no intention to repay the banks, credit unions, credit card companies, and retail stores for the cash advances. During the course of this scheme, it is alleged that over 50 separate credit cards were issued and that credit card issuers and banks incurred losses totaling nearly $500,000. In this scheme, Ghill and Ahsan Ullah are charged with conspiracy to commit bank fraud, bank fraud, and money laundering.
Scheme 2: Trafficking in Untaxed Cigarettes (Charging Ghill, Ahsan Ullah, and Asmat Ullah)
As background, companies in Oklahoma who purchase untaxed tobacco products from tobacco manufacturers are required to be licensed by the State and required to report all sales to the Oklahoma Tax Commission, pay the excise tax, purchase tax stamps and then place a tax stamp on each pack of cigarettes prior to distribution and sale. It is alleged that all three defendants operated a scheme to profit from the sale of contraband cigarettes and smokeless tobacco sold by them without the required excise taxes being assessed and paid to the State of Oklahoma. According to the indictment, Prime Distributors, LLC ("Prime"), operated as a wholesale convenience distribution company that supplied products, including cigarettes and smokeless tobacco, to convenience stores in Oklahoma. Prime was authorized by the State of Oklahoma to be a stamping agent and was operated by Ahsan Ullah and Asmat Ullah until the fall of 2006 when, the indictment alleges, an audit revealed that Prime was not placing tax stamps on its cigarettes. This allowed the defendants to increase their profits on tobacco sales by avoiding paying state and federal tobacco tax. Prime relinquished its license and could no longer lawfully sell tobacco in the State of Oklahoma. In the fall of 2006, Ghill and Ahsan Ullah incorporated a new company named Prime Time Distribution, LLC ("Prime Time"), located at the same address, operated by Ahsan Ullah and Asmat Ullah and was authorized by the State of Oklahoma to be a tax stamp licensee. However, it is alleged, the defendants continued to buy and sell contraband tobacco products through Prime Time without the proper stamp on the cigarettes or tax on the smokeless tobacco.
Upon initiating a subsequent investigation, undercover ATF agents met with the defendants. It is alleged that the defendants agreed with the undercover ATF agents to operate a delivery hub in Oklahoma City for possession, sale, and distribution of contraband cigarettes and smokeless tobacco. It is alleged that from February 2007 through July 2009, the defendants sold at least 103,700 cartons (20,740,000 cigarettes) of contraband cigarettes and at least 265,310 of cans of contraband smokeless tobacco. In this scheme, all three defendants are charged with conspiracy, trafficking in contraband cigarettes and smokeless tobacco, and money laundering.
Pleas and Sentencing
Last Friday, Ghill pled guilty to committing bank fraud, money laundering, and conspiracy to traffic contraband cigarettes and smokeless tobacco. He was sentenced by United States District Judge Stephen P. Friot to serve 72 months in prison and pay restitution to be determined at a later date.
Also on Friday, Asmat Ullah pled guilty to conspiracy to traffic contraband cigarettes and smokeless tobacco. He was sentenced by Judge Friot to serve five years probation and pay restitution to be determined at a later date.
Charges remain pending against Defendant Ahsan Ullah who fled and is considered a fugitive. The public is reminded that the indictment charging Ahsan Ullah is merely an accusation and that he is presumed innocent unless and until proven guilty. Further, if any member of the public knows of the whereabouts of Ahsan Ullah, they are asked to contact law enforcement.
This case is the result of a joint investigated by the Bureau of Alcohol Tobacco Firearms and Explosives, the United States Secret Service, the Oklahoma City Police Department, the Oklahoma Highway Patrol, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigative Division, United States Postal Service, the Oklahoma Tax Commission and the Oklahoma Department of Public Safety. This case is being prosecuted by Assistant U.S. Attorneys Susan Dickerson Cox and Robert D. Gifford, II.