Richmond Store Owner Pleads Guilty In Cigarette And Wire Fraud Scheme
RICHMOND, Va. – Mohamed Seid Ahmed Mohamed, 56, of North Chesterfield, Virginia, pleaded guilty today to conspiracy to commit wire fraud and to traffic in contraband cigarettes.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office, made the announcement after the plea was accepted by United States Magistrate Judge David J. Novak.
Mohamed was charged with the conspiracy on August 25, 2014, in a one-count criminal information. He faces a maximum penalty of 5 years’ imprisonment, full restitution, and a fine of $250,000, when he is sentenced on December 11, 2014 before Senior United States District Judge Robert E. Payne.
According to the statement of facts filed with the plea agreement, Mohamed was the owner and operator of The Cigarette Club, LLC, a cigarette retail store in Richmond, Virginia, doing business under the name City Cigarettes. From June 2011 to Jan. 2014, Mohamed and his co-conspirators purchased over 440,000 cartons—worth approximately $19.8 million—of various brands of cigarettes at wholesale stores in the Richmond area using multiple membership accounts. In making the purchases, Mohamed and his co-conspirators certified that the cigarettes would be resold through Mohamed’s retail business. As a result, Mohamed and his co-conspirators were able to purchase the cigarettes without paying the applicable Virginia Retail Sales and Use Tax. However, at the time of each purchase, Mohamed and his co-conspirators intended to sell, and ultimately did sell, the overwhelming majority of the cigarettes to individuals who they knew were transporting the cigarettes to jurisdictions outside of the Commonwealth of Virginia for resale as untaxed cigarettes. Mohamed and his co-conspirators never intended to and, in fact, did not collect or pay, the applicable Virginia Retail Sales and Use Tax for the cigarettes purchased at the wholesaler. The activity of the conspiracy resulted in lost sales tax revenue to the Commonwealth of Virginia in the amount of $1,009,046.
This case was investigated by the Internal Revenue Service, with assistance from the Multi-Jurisdictional Special Operations Group. Assistant United States Attorney Dominick S. Gerace is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.