Nine Arrested For Conspiracy To Traffic In Contraband Cigarettes
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announces that the following men were indicted for conspiracy to traffic in contraband cigarettes, trafficking in contraband cigarettes, and aiding and abetting, and those indicated below in the Eastern District of North Carolina had their initial appearance in federal court today. The others are scheduled for their initial appearance in federal court in New York later today.
MOKHTAR ABDUL KAREM KHASHAFA, 34, of Durham (EDNC)
YOUSEF ABDULLA MOHAMED KAID, 35, of Durham (EDNC)
IBRAHIM ABDULLA KAIED, 39, of Durham (EDNC)
TAHA AL MONTASER, 31, of Greenville, North Carolina (EDNC)
AHMED AL MONTASER, 30, of Staten Island, New York
MOHAMMED NASSER ALI, a/k/a “Mo”, 50, of Durham (EDNC)
JABBAR MAZAB, a/k/a “Obaydah”, 38, of Brooklyn, New York
BASSAM SAAD, a/k/a “Sam”, 31, of Syracuse, New York
MUHAMMED LABBID AL HADDAWI, 27, of Durham (EDNC)
The Grand Jury indicted the above listed individuals on January 26, 2016.
According to the investigation, the object of the conspiracy was to profit from the illegal sale of large quantities of cigarettes by purchasing them in North Carolina and then selling them in the State of New York and New York City without paying the much higher taxes that apply there. During the relevant time period, the North Carolina state excise tax was $0.45 per pack of 20 cigarettes, or $4.50 per carton of ten packs. The New York State excise tax was $4.35 per pack ($43.50 per carton), and the New York City excise tax was an additional $1.50 per pack ($15.00 per carton). The total combined excise tax for New York State and New York City was $5.85 per pack, or $58.50 per carton. By evading the New York State and New York City excise taxes, Defendants and their co-conspirators were able to sell the contraband cigarettes at a lower cost, and at a higher profit margin, than competing cigarette sellers in New York who complied with federal and state law.
The Indictment alleges that some of the defendants and co-conspirators owned or operated retail stores in North Carolina, which enabled them to make wholesale purchases of large quantities of cigarettes from wholesale dealers, far exceeding the quantities of cigarettes actually being sold at the stores to retail customers in North Carolina. Defendants and co-conspirators in New York would arrange for the purchase of contraband cigarettes from defendants and co-conspirators in North Carolina. The contraband cigarettes would be transported by vehicle from North Carolina to various storage locations in New York. Various defendants and co-conspirators would apply counterfeit tax stamps to the cigarette packaging to create the false appearance that applicable New York State and New York City excise taxes had been paid.
The Indictment alleges that, from on or about June 15, 2015 to on or about January 16, 2016, the defendants and co-conspirators transported and sold approximately 22,205 cartons of contraband cigarettes, resulting in a total tax loss to the State and City of New York of approximately $1,224,947.50.
The charges are punishable by up to 5 years imprisonment, a fine of up to $250,00, and a term of supervised release of up to 3 years.
The charges and allegations contained in the indictment are merely accusations. The defendants are considered innocent unless and until proven guilty in a court of law.
The case is being investigated by FBI Raleigh with assistance from FBI Newburgh NY, FBI New York, FBI Syracuse, North Carolina State Bureau of Investigation, North Carolina Department of Public Safety, Raleigh Police Department, Durham Police Department, Cary Police Department, Greenville Police Department, North Carolina Alcohol Law Enforcement, North Carolina Probation and Parole, North Carolina State Highway Patrol, New York Department of Taxation and Finance, Internal Revenue Service, United States Marshals Service, and the Virginia National Guard Counterdrug Taskforce. Assistant United States Attorney Eric Goulian is representing the government in this case.