Center for Tobacco Products News

By Tim McGlone
The Virginian-Pilot
© February 15, 2011

NORFOLK

A cigarette dealer was sentenced Monday to three years and one month in federal prison and ordered to repay nearly $2 million after admitting his role in a conspiracy to sell thousands of cartons of untaxed cigarettes.

Guishon Dong, who goes by Benson, pleaded guilty to conspiracy to traffic in contraband cigarettes. Two accomplices, brothers Rong Kai Yang, known as Andy, and Min Hai Yang, known as Simon, also pleaded guilty and will be sentenced April 5.

The three men admitted that they sold thousands of cartons of untaxed cigarettes on the black market, taking them from Virginia to the New York City region between 2009 and last year.

After learning of the operation, undercover agents with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, acting as wholesale cigarette distributors in Norfolk, began selling the cartons to the men. On one occasion in January 2010, Dong purchased 2,280 cartons of contraband cigarettes for $59,890, according to court filings.

In all, the defendants executed 36 cigarette transactions involving nearly 40,000 cartons. The cigarettes were then sold at a premium in the New York area using counterfeit tax stamps. The tax loss per carton was $48.

U.S. District Judge Robert G. Doumar ordered the defendants to repay more than $1.9 million in lost tax revenue. The government has seized $65,000 from the defendants.

The Yang brothers operate a Chinese restaurant called Speedy Wok in the Greenville, N.C., area. Dong also lived in that area but is in the country illegally and will now face deportation, according to a court filing. He has an asylum application pending.

Dong also admitted that he traveled to China to purchase the counterfeit tax stamps.