Tobacco Wholesaler Charged in Tax Fraud Scheme
BOSTON – The owner of tobacco wholesale businesses in Massachusetts and New Hampshire was charged in an indictment unsealed on Dec. 7, 2015 in U.S. District Court in Springfield in connection with his scheme to defraud Massachusetts and New Hampshire of substantial tobacco tax revenue.Khalid Siddique, 59, of Attleboro, was charged in a 28-count indictment with two counts of conspiracy to commit wire fraud, 10 counts wire fraud, five counts of trafficking in contraband smokeless tobacco and 11 counts of money laundering.
The indictment alleges that between 2006 and 2012, Siddique defrauded Massachusetts and New Hampshire by failing to pay excise taxes on smokeless tobacco and cigars purchased from businesses he owned. It is alleged that co-conspirator Syed Bokhari transferred smokeless tobacco to the Attleboro business without reporting such transfers to the appropriate state tax authorities, as required under the Prevent All Cigarette Trafficking (PACT) Act. Siddique distributed smokeless tobacco without paying any of the required taxes, and filed false tobacco tax returns for cigars which vastly under-stated the amount of tax he owed.
On Thursday, Dec. 3, 2015, additional charges were handed down by a federal grand jury against co-defendant Syed I. Bokhari, 51, in connection with his role in the scheme which defrauded Massachusetts and Connecticut of substantial tobacco tax revenue.
The charges of conspiracy and wire fraud provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss for each count. The change of trafficking in contraband smokeless tobacco provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss for each count. The charge of money laundering provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000 or twice the value of the property involved in the transaction for each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on 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 Investigation in Boston; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Commissioner Mark Nunnelly of the Massachusetts Department of Revenue; and Commissioner Kevin B. Sullivan of the Connecticut Department of Revenue Services, made the announcement today. The cases are being prosecuted by Assistant U.S. Attorneys Alex J. Grant and Katharine Wagner of Ortiz’s Springfield Branch Office.
The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.