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Press Release

Three Arrested in Connection with International Money Laundering Conspiracy

For Immediate Release
U.S. Attorney's Office, Northern District of New York
Indicted for their Roles in a $46.8 Million Tobacco Smuggling Scheme

ALBANY, NEW YORK – Three men have been arrested for their roles in a $46.8 million money laundering scheme involving the smuggling of cut rag tobacco into Canada from the United States.

The announcement was made by United States Attorney Grant C. Jaquith; Kevin Kelly, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI); and Jonathan D. Larsen, Special Agent In Charge, New York Field Office, Internal Revenue Service – Criminal Investigation (IRS-CID).

Edgar M. Baker, Jr., age 46, of Southern Pines, North Carolina; Jeffrey Doctor, age 48, of Washington, D.C.; and Carey Terrance, age 39, of Hogansburg, New York, were arrested last week following their indictment on July 23, 2020, on one count of conspiracy to commit money laundering.

The charges in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.

The indictment alleges that, from approximately 2013 to 2016, the defendants worked together and with others to acquire cut rag tobacco and smuggle it into Canada, where it was made into contraband cigarettes. Members of the conspiracy sold the contraband cigarettes, making substantial profits by avoiding taxes and duties, and used some of their profits to buy more cut rag tobacco that they sent into Canada.

Funds to purchase the cut rag tobacco were sent from Canada, often through the Northern District of New York, to North Carolina.  Once purchased, the cut rag tobacco was delivered to warehouses and buildings in the Northeastern United States, including on the Akwesasne St. Regis Mohawk Indian Reservation, where it was staged for smuggling into Canada. Each truckload of cut rag tobacco in the scheme (totaling over 18 million pounds) was worth approximately $3 million in lost tax revenue for the Canadian and Quebecois governments.

If convicted, each defendant faces up to 20 years in prison, a fine of up to $500,000 or twice the value of the funds involved in the conspiracy, and a term of supervised release of up to 3 years. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.

This case is being investigated by HSI and IRS-CID, and is being prosecuted by Assistant U.S. Attorney Emily C. Powers.

Updated August 12, 2020