California Tobacco Company Executive Charged in Scheme to Avoid the Payment of More than $5 Million in Federal Excise Taxes
A California tobacco company executive on Friday was arrested after being charged with a conspiracy to evade the payment of millions of dollars in excise taxes on imported cigars.
Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Nicholas Colucci, Assistant Administrator for Field Operations, Alcohol and Tobacco Tax and Trade Bureau (TTB), and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Washington, DC Field Office, made the announcement.
Akrum Alrahib, 41, of Los Angeles, California, was charged by indictment with the following counts: conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371; conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349; wire fraud, in violation of Title 18, United States Code, Section 1343. The indictment also charged Alrahib with violations of the Internal Revenue Code, including: refusing to pay Federal Tobacco Excise Tax on large cigars, and attempting to evade or defeat the tax or payment thereof, in violation of 26 U.S.C. § 5762(a)(3); and willfully attempting to evade or defeat Federal Tobacco Excise Tax on large cigars, in violation of Title 26 U.S.C. § 7201.
According to the indictment, Alrahib was the President of Trendsettah USA, Inc. (“Trendsettah”), a California tobacco company authorized to transact business in the State of Florida. Trendsettah sold various tobacco products, such as large cigars, and marijuana paraphernalia, such as “blunt wraps,” many of which were imported from the Dominican Republic.
In 2013, Alrahib partnered with Gitano Pierre Bryant, Jr., a TTB-permitted tobacco importer, to import large cigars from the Dominican Republic into Miami, Florida. The indictment alleges that Alrahib and Bryant agreed to lower their costs by underreporting the Federal Tobacco Excise Tax that was due and owing on the imported cigars. According to the charging document, Alrahib and Bryant consistently evaded Federal Tobacco Excise Tax by concealing the price Alrahib actually paid for the cigars.
It is alleged that Alrahib paid over $9 million for untaxed tobacco products during the course of the charged conspiracies and received over $700,000 in kickbacks from Bryant, on which aggregate amount he did not pay the required federal excise tax.
Alrahib will remain in custody pending his removal to the Southern District of Florida.
If convicted, Alrahib can be sentenced up to five years imprisonment on the conspiracy to defraud the United States charge and each of the charges for violations of the Internal Revenue Code, and up to 20 years imprisonment on the wire fraud and wire fraud conspiracy charges. Additionally, the court may impose a fine of up to $250,000, on each count alleged in the indictment.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the TTB and IRS-CI. The case is being prosecuted by Assistant United States Attorney Christopher Browne.
An indictment contains mere allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.