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Press Release

Longmeadow Man Pleads Guilty to Tobacco Tax Fraud and Illegal Check-Cashing Business

For Immediate Release
U.S. Attorney's Office, District of Massachusetts

BOSTON – A Longmeadow, Mass. man pleaded guilty in two cases in U.S. District Court in Springfield in connection with evading payment of tobacco sales tax and operating an illegal check-cashing business.

Satish Kumar, 60, pleaded guilty in one case to one count of conspiracy, three counts of wire fraud and one count of money laundering.  In the second case, Kumar pleaded guilty to one count of failure to register a money transmitting business.  U.S. District Court Judge Mark. G. Mastroianni scheduled sentencing for April 13, 2016.

In 2006, Kumar purchased a wholesale warehouse business in Berlin, Conn.  Kumar systematically evaded Connecticut state tobacco taxes, in selling cigars and smokeless tobacco to convenience stores and gas stations.  Kumar consistently filed false tobacco tax returns with Connecticut state tax authorities, paying just two percent of the tax owed.  In 2008, Kumar sold the business, but he continued to receive proceeds from the continuing tobacco tax fraud that occurred at the Berlin warehouse.  In June 2012, the fraud ceased when federal agents executed a search warrant at the Berlin warehouse and 12 other locations in Massachusetts, Connecticut, and Pennsylvania.  During the six-year scheme, Kumar and others helped to evade over $16 million in taxes owed to the state of Connecticut.

In the illegal check cashing case, Kumar owned a liquor store in Springfield, Mass. that also acted as an unregistered money transmitting business.  Kumar cashed checks without the required registration despite warnings from his bank.  Among the checks cashed were 195 United States Treasury tax refund checks worth approximately $1.2 million obtained through fraudulent returns filed with the IRS.

The charges of conspiracy and failure to register a money transmitting business provide for sentences of no greater than five years in prison, three years of supervised release and a $250,000 fine.  The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000.  The charge of money laundering provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Commissioner Mark Nunnelly of the Massachusetts Department of Revenue; Commissioner Kevin B. Sullivan of the Connecticut Department of Revenue Services; and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today.  The tobacco tax fraud case is being prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office.  The illegal check-cashing case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz’s Springfield Branch Office and Sarah Devlin of the Justice Department’s Asset Forfeiture and Money Laundering Section.

Updated February 4, 2016