From: The Dispatch
By News Editor, Shawn J. Soper
OCEAN CITY — Two local residents, indicted by a New York grand jury in May for allegedly being the ringleader and enterprise treasurer of a vast cigarette smuggling and money laundering operation with possible links to terrorism, are scheduled to be back in court Monday for the next step in what will likely be a lengthy legal process.
In mid-May, federal officials concluded an investigation into a vast, multi-million dollar cigarette smuggling operation with raids on two locations in and around the Ocean City area including the West Ocean City homes of local residents and business owners Basel Ramadan, 42, who has been called the operation’s “ringleader,” and Samer Ramadan, 40, who is being called the “enterprise treasurer” of the operation. Also indicted were 14 other alleged co-conspirators, from transporters to distributors to resellers, who were also rounded up at locations all over the mid-Atlantic region on the same day in May.
On Monday, Basel and Samer Ramadan and each of the alleged co-conspirators are scheduled to appear in King’s County, N.Y. Supreme Court for a hearing characterized this week by the New York Attorney General’s Office as a “control date.” Essentially, the hearing is another step in the legal process when bond review appeals can be heard, pre-trial motions can be filed and other business of the court related to the prosecution can be handled.
On June 4, Samer Ramadan appeared in court for a bail review hearing and was ordered to be held on a $15 million bond. Basel Ramadan also appeared at the same hearing, but the hearing was adjourned before his bail was set and he remains in custody without bond.
At the Ramadan’s West Ocean City homes in the Oyster Harbor community, $1.4 million in large black bags was recovered, along with 20,000 cartons of untaxed cigarettes. Also seized were numerous vehicles and other property belonging to the Ramadans. The Ramadans allegedly conducted the vast cigarette smuggling operation out of their Ocean City properties.
According to the New York Attorney General’s Office, the Ramadans and their co-conspirators allegedly funneled thousands of cartons of untaxed smokes and millions of dollars in ill-gotten revenue through Ocean City and Worcester County from a wholesaler in Virginia to a distribution warehouse in Delaware, from whence the illegal, untaxed cigarettes were distributed to retail outlets all over New York City and upstate.
Immediately following the raids in May, there were references to a possible link between the co-conspirators and known terrorists groups, fueling speculation much of the millions of dollars in proceeds from the alleged illegal enterprise could be in the hands of terrorists, but a firm link has not been established. The New York Attorney General’s Office this week confirmed that investigation is ongoing.
Meanwhile, a cigarette distribution company based in Lancaster, Pa. has filed for bankruptcy because of its loose association with the alleged conspirators. Cooper-Booth Inc., from which the co-conspirators purchased the thousands of packs of untaxed and unstamped cigarettes for redistribution in New York and other locations at huge mark-ups, in late May filed for Chapter 11 protection because its operating accounts with PNC Bank were frozen in the wake of the investigation.
Cooper-Booth, which has been in business since 1865 and family-owned for several generations, is one of the largest wholesalers to convenience stores and retailers in the country. A successful Chapter 11 filing will allow the company to continue to operate while reorganizing and paying off creditors to the tune of around $10 million. According to court documents, Cooper-Booth was “experiencing sales growth, were operating profitably and the future was bright and prosperous, however, the debtors have been the victims of unfortunate circumstances.”
Cooper-Booth’s Chapter 11 filing goes on to enumerate the events that led to the seizure of its operating accounts.
“Last week, we learned that one of our customers with multiple locations in Virginia was accused of smuggling Virginia stamped cigarettes into New York,” court documents read. “As part of this investigation, the U.S. government on Thursday of last week seized the main operating account of the wholesale debtor at PNC to recover payments for merchandise made by the customer that was arrested, putting the company in the precarious position of not being able to access funds to run the day-to-day operations of the business. We had no knowledge that the account had been seized until the next day when we received notice from PNC that payments and wires we had initiated were being returned because our account had been frozen.”
Listed among Cooper-Booth’s top 20 creditors in court documents is the Maryland Comptroller of the Treasury Alcohol and Tobacco Tax Unit to the tune of $7.4 million. Also listed in the top 20 is the Pennsylvania Department of Revenue at $3.3 million, the New York State Department of Tax and Finance at $3.1 million and similar state agencies in New Jersey and Virginia.
