Department of Justice
For Immediate Release
Fourteen People Indicted on Charges Involving A Bootleg Cigarette Scheme
St. Louis, MO –Fourteen people have been charged in a federal indictment alleging a large-scale conspiracy to traffic in contraband cigarettes. Twelve of the fourteen defendants were arrested earlier today, and the two remaining defendants are expected to surrender in the near future. The indictment had been returned on February 18, 2016, but remained sealed until the arrests today. The defendants are primarily from New York and the Atlanta area.
The indictment alleges that the defendants purchased large quantities of cigarettes in Missouri and Georgia, where the state tax on cigarettes is substantially lower than in New York, transported them to New York, sold the cigarettes without paying the New York tax, and concealed the transactions, resulting in a substantial profit.
According to the indictment, the State of Missouri and the State of New York require that a tax stamp be affixed to each package of cigarettes as proof of tax payments. New York currently imposes a combined state-local tax of $5.85 per package, compared with Missouri which imposes combined state-local tax of 22 to 24 cents per package in St. Louis County and St. Louis City. It is estimated that the tax loss for New York State is in excess of twenty million dollars.
If convicted, conspiracy to traffic in contraband cigarettes and money laundering carries a maximum penalty of five years in prison, and/or a fine up to $250,000; each count of trafficking in contraband cigarettes carries a maximum of five years in prison and/or fines up to $250,000; each count of money laundering carries a maximum of 20 years in prison and/or fines up to $500,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and IRS Criminal Investigation, with the assistance of multiple federal, state and local law enforcement agencies in Missouri, New York, Georgia, Indiana and Illinois.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.