Sharon Man Sentenced for Tobacco Tax Fraud and Money Laundering
BOSTON - A Sharon man was sentenced today in U.S. District Court in Boston in connection with illegally selling tobacco products and laundering the proceeds.
Kaleem Ahmad, 47, was sentenced by U.S. District Court Judge William G. Young to two years in prison, one year of supervised release and restitution in an amount to be determined by the Court at a later time. The Court also ordered forfeiture of hundreds of thousands of dollars in tobacco products and over $138,000 belonging to Ahmad and the tax-evading wholesale tobacco business in which he engaged. In May 2016, he pleaded guilty to conspiring to defraud Massachusetts of wholesale tobacco taxes and to filing a false personal income tax return.
Muhammad Saleem Iqbal, his partner, and Ahmad operated a wholesale business in Norwood under the name “Pick N Dip,” that sold tobacco products, including cigars and smokeless tobacco (such as snuff and chewing tobacco), as well as other non-tobacco items, to convenience stores, gas stations and other retail businesses. Under state law, smokeless tobacco wholesalers must file an excise tax form monthly and pay a 210% excise tax on smokeless tobacco brought into Massachusetts. Cigar wholesalers must file an excise tax form quarterly and must pay a 40% excise tax on cigars brought into Massachusetts.
In order to evade tobacco taxes, beginning around 2010, the three repeatedly purchased tens of thousands of dollars of smokeless tobacco and cigars in Pennsylvania where no taxes are imposed for these products. They then arranged to have the products covertly transported to Massachusetts for resale, without filing the records required by Massachusetts state law and federal law, and without paying excise taxes.
Ahmad and others transported more than $50,000 in cash at a time from Massachusetts to Pennsylvania where the money was used to purchase additional untaxed smokeless tobacco and cigars. They also engaged in large cash transactions in order to conceal and disguise the nature, location, source, ownership and control of the proceeds of their illegal tobacco business and to avoid transaction reporting requirements under federal and state law.
Iqbal was sentenced yesterday to 42 months in prison, two years of supervised release and ordered to pay restitution of $28,027,946 for his role in the scheme.
United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and David W. Hall, Special Agent in Charge of the U.S. Department of State, Diplomatic Security Service, Boston Field Office, made the announcement today. Valuable assistance was also provided by the Massachusetts Department of Revenue. Assistant U.S. Attorneys Stephen P. Heymann of Ortiz’s Economic Crimes Unit and Doreen Rachel, Chief of Ortiz’s Asset Forfeiture Unit, handled the case.