Nine men, including five from Durham, have been charged with taking part in a scheme to take contraband cigarettes from North Carolina and sell them in New York without paying the higher state and local tobacco taxes there.
Federal officials say that over a seven-month period starting last June about 22,205 cartons of cigarettes purchased in North Carolina were sold in New York with counterfeit tax stamps that indicated the taxes had been paid. The scheme resulted in the loss of more than $1.2 million in taxes to the state and city of New York, according to the U.S. Attorney’s Office in Raleigh, which announced indictments against the men Wednesday.
Six of the men are from North Carolina and made their first appearance in federal court in Raleigh and Greenville on Wednesday. They are Taha al Montaser, 31, of Greenville, and Mokhtar Abdul Karem Khashafa, 34, Yousef Abdulla Mohamed Kaid, 35, Ibrahim Abdulla Kaied, 39, Mohammed Nasser Ali, 50, and Muhammed Labbid Al Haddawi, 27, all of Durham.
Three others – Ahmed al Montaser, 30, of Staten Island, Jabbar Mazab, 38, of Brooklyn and Bassam Saad, 31, of Syracuse – appeared in court in New York.
A federal grand jury indicted all nine on charges of conspiracy to traffic in contraband cigarettes, trafficking in contraband cigarettes, and aiding and abetting. They face up to 5 years in prison and fines of up to $250,000.
Federal officials say some of the North Carolina men own or operate stores that sell cigarettes and were able to buy large quantities at wholesale prices.
But the real profit was in avoiding New York taxes. North Carolina has one of the lowest excise taxes on cigarettes, at 45 cents per pack, while New York’s is the highest, at $4.35. The combined state and local taxes on a pack of cigarettes in New York City is $5.85 per pack.