From the daily archives: Tuesday, August 10, 2010

Attorney General Edmund G. Brown Jr. announced today that special agents with the state Department of Justice, working closely with the U.S. Attorney’s office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the state Board of Equalization, have charged 15 individuals with tobacco smuggling and tax evasion schemes that diverted some $34 million from state and county health care programs and the state’s general fund.

The three-year investigation has uncovered “rampant fraud” among tobacco distributors with estimated tax losses totaling more than $80 million, including today’s case. More than $20 million in tobacco, property and cash has been seized.

“This is rampant fraud where fake invoices are used to disguise contraband tobacco, and often get passed from distributor to wholesaler to the mom-and-pop store,” said Brown. “We’re following every phony paper trail to ensure that the state collects every penny it’s owed in tobacco product taxes.”

The 15 individuals were arrested last week and released on bonds ranging from $50,000 to $250,000. The charges, which include mail fraud, conspiracy to commit mail fraud and trafficking in contraband tobacco, were filed in Sacramento and Los Angeles U.S. District Courts. The defendants charged in Los Angeles have been arraigned there, and the Sacramento defendants will be arraigned later this month.

The taxes evaded in these cases were for “other tobacco products,” such as cigars, chewing tobacco and leaf tobacco.

Under California law, distributors of these “other tobacco products” are required to collect an excise tax of more than 45% from the wholesaler and submit monthly reports to the Board of Equalization. To evade these taxes, distributors set up their businesses in Nevada or Arizona and report that they are exporting the tobacco and thus owe no excise taxes. The products are then smuggled into California, where actual sales are concealed by the use of shell companies to receive the products, false documents that understate the amount of tobacco, and the use of untraceable cash sales to wholesalers.

“This investigation has exposed systematic and widespread tax evasion in the distribution of tobacco products in California,” said U.S. Attorney Benjamin B. Wagner. “Participants in that industry who might be tempted to short-change the State of California should take note of the indictments announced today, and should understand that our investigations are not over.”

In 2008, the task force issued a search warrant against Ideal Tobacco, a large Nevada distributor. Using information seized from Ideal Tobacco, agents tracked down Ideal’s largest customers who were buying tobacco from Ideal and selling it in California, but failing to pay state’s tobacco tax.

The individuals and charges include:

– Galiom Mansour, president and CEO, and Naeim Hanno, CFO, of South Bay Wholesale, Inc. in Carson, are charged with 39 counts of mail fraud. Estimated losses to the state are $519,000 in unpaid tobacco products tax.
– Adib Sirope and Rimoun Mansour, partners in Pay-Less Wholesale in North Hollywood, are charged with 39 counts of mail fraud. Estimated losses to the state are $2.5 million in unpaid tobacco products tax.
– Atif Henan, Atef Shehata, Samy Girgis and Soheir Girgis, partners in Classic Wholesale (and later House of Tobacco) in Los Angeles, are charged with 17 counts of mail fraud. Estimated losses to the state are $1.5 million in unpaid tobacco products tax.
– Jack Haroun, president and CEO of Wholesale Palace in Burbank, is charged with 37 counts of mail fraud. Estimated losses to the state are $554,000 in unpaid tobacco products tax.
– Mohammed Halaweh, using the names CTC Distribution and T&T Tobacco for unlicensed companies in Los Angeles, is charged with 13 counts of mail fraud and eight counts of trafficking in contraband tobacco. Estimated losses to the state are $5.3 million in unpaid tobacco products tax.
– Mehdi Mohammed Humkar, using the name M&D Tobacco for an unlicensed company in Los Angeles, is charged with 15 counts of mail fraud and seven counts of trafficking in contraband tobacco. Estimated losses to the state are $528,000 in unpaid tobacco products tax.
– Rajnish Makkad, Charanjit Singh, and Amrit Singh, principals in Arctic Inc., a Nevada corporation not licensed to distribute OTP, and IIG Inc. in Los Angeles, are charged with 19 counts of mail fraud and 16 counts of trafficking in contraband tobacco. Estimated losses to the state are $13.8 million in unpaid tobacco products tax.
– Abdurrahman Yousuf, owner and operator of A to Z Cash and Carry in Los Angeles, is charged with 17 counts of mail fraud and 13 counts of trafficking in contraband tobacco. Estimated losses to the state are $2.3 million in unpaid tobacco products tax.

While sentencing varies, the maximum penalty for each count of mail fraud is 20 years in prison, a $250,000 fine, and a three-year term of supervised release. The maximum penalty for each count of trafficking in contraband tobacco and each count of conspiracy is five years in prison, a $250,000 fine, and a three-year term of supervised release.

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You may view the full account of this posting, including possible attachments, in the News & Alerts section of our website at: http://ag.ca.gov/newsalerts/release.php?id=1972

 

SAN DIEGO — U.S. Customs and Border Protection officers at three major ports of entry along the California / Mexico border seized more than $2.3 million worth of crystal methamphetamine hidden in inside secret areas of vehicles.
The most significant seizure occurred at the San Ysidro Port of Entry on Friday at about 4 p.m., after 39-year-old female Mexican national driving a Chevy Tahoe attempted to enter the country. CBP officers noticed anomalies while inspecting the vehicle. A CBP K-9 team was summoned and a narcotic detector dog alerted to the vehicle. After an intensive inspection CBP officers discovered a specially modified gas tank that contained 25 packages of crystal meth with an estimated street value of more than $1,059,000.
The following day at about 6:30 a.m., CBP officers at the Otay Mesa Port of Entry inspected an older Mercedes Benz driven by a 30-year-old male U.S. citizen.
A CBP K-9 team was summoned to the vehicle and the narcotic detector dog alerted leading officers to perform an intensive inspection.
Subsequently, officers discovered six cylindrical packages hidden in the vehicle’s rocker panels that contained crystal methamphetamine with an estimated street value of more than $552,000.
On Sunday, CBP officers at the Calexico Port of Entry inspected a late model Mitsubishi SUV driven by a 24-year-old U.S. citizen female. A CBP K-9 alerted to the vehicle while waiting in line to cross into the U.S. CBP officers directed the driver to secondary inspection.
During inspection, officer discovered a gas tank with a specially built compartment that contained 35 packages of crystal meth with a value of $695,376.
The total weight of the three seizures was 128 pounds with an estimated street value of more than $2.3 million.
Pete Flores, San Diego CBP assistant director for trade said “I am proud of the outstanding work the officers at our southern ports of entry consistently do to keep our communities safe from these drugs and the crime it generates. These significant seizures have dealt a blow to the smuggling organizations.”
CBP officers seized the drugs and the vehicles and turned over the custody of the three individuals to U.S. Immigration and Customs Enforcement Agents. All are awaiting arraignment at the Metropolitan Correctional Center in San Diego.

 

Here are some updates regarding the Son-Shine Counseling Center (SSCC):

1)      We have a new clinician, Helen McClain, LCSW, and she has many skills, with special expertise in working with athletes.  She desires to        develop special programs related to Sports Psychology.

2)      The SSCC now has three bilingual therapists to better serve our bicultural community.

3)      Please check out our new website and forward this email to an interested party. Go to www.son-shine-counseling.com

4)      Special Saturday programs are available for pregnant clients. One desire is to start a support group, but individual counseling can help          to reduce the stress of pregnancy, improve parenting and resolve problems in relationships.

Questions, call 353-5059 or for Spanish speaking folks, 353-7667.

 

CALEXICO — U.S. Customs and Border Protection (CBP) officers in collaboration with Immigration and Customs Enforcement (ICE) agents and Border Patrol (BP) agents stopped $2,111,119 in undeclared currency from leaving the United States during an outbound enforcement operation at the Calexico downtown port of entry over the weekend.
The incident occurred at about 8:30 a.m. on Sunday, August 8th, when officers conducting enforcement outbound operations referred a black 2004 Chevrolet Silverado pick-up truck for an intensive inspection.
The driver, a 29-year-old male United States citizen and resident of Calexico, gave officers a negative declaration to possessing more than $10,000 or firearms.
The intensive examination that included a currency-firearm detector dog led officers to the discovery of over two million dollars in U.S. currency concealed inside two pieces of luggage, a duffle bag and a large plastic tub all located within the cabin area of the truck.
CBP officers arrested the driver and turned him over to the custody of ICE agents for further investigation. CBP seized the money and vehicle.
Assistant Port Director David Salazar stated, “This seizure is a testament of our officer’s commitment to enforcing U.S. Laws and stopping the flow of illegal proceeds and weapons from going into Mexico.
It is a federal offense not to declare currency or monetary instruments totaling more than $10,000 to a CBP officer upon entry or exit from the U.S. or to conceal it with intent to evade reporting requirements. Failure to declare may result in seizure of the currency and/or arrest.
 
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