Editor’s Note: The Bureau of Alcohol, Tobacco, Firearms and Explosives primarily enforces federal tobacco law violation cases that have “a nexus to violent organized crime.” See ATF Fact Sheet here.
From: Kansas City InfoZone
Three Canadian Men Plead Guilty in KC to NY Contraband Cigarette Scheme
Three Canadian men pleaded guilty in federal court Thursday to their roles in a $17 million scheme to transport hundreds of thousands of cartons of contraband cigarettes from the Kansas City, MO, area to the state of New York, where they were sold primarily on Indian reservations.
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Conspirators purchased more than $17 million worth of contraband cigarettes from ATF agents during an undercover operation. Approximately 620,600 cartons of cigarettes – containing 10 packs per carton – were transported to New York without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in the state of New York. The benefit to those smoke shops was that they did not pay New York state cigarette taxes; thus, they could undercut the prices charged by off-reservation cigarette retailers by over $40 per carton. The total state excise tax lost to the state of New York was more than $8 million, which has been paid in restitution to the state by the perpetrators of the scheme.
David Bishop admitted that he received commissions or “brokerage fees” for coordinating contraband cigarette orders between co-defendant Craig Sheffler of Independence, MO, the owner of Cheap Tobacco Wholesale, and Gholamreza Tadaiyon of Weston, FL.
