Mohamed Afeez, Tobacco Tax Fraud, Massachusetts 2017

A Worcester man admitted to defrauding the Commonwealth of Massachusetts of tobacco excise taxes, according to a recent guilty plea.

Mohamed Afeez, 32, pleaded guilty to subscribing a false tax return and conspiracy in connection with a scheme to evade tobacco taxes, U.S. District Court Judge Timothy S. Hillman scheduled sentencing for September 13, 2017.

Afeez operated a wholesale business in Worcester that sold tobacco products, including cigars, smoking tobacco, and smokeless tobacco, as well as other non-tobacco items, to convenience stores, gas stations, and other retail businesses.

Under state law, smokeless tobacco wholesalers must file an excise tax form monthly and pay a 210% excise tax on smokeless tobacco brought into Massachusetts. Cigar wholesalers must file an excise tax form quarterly and pay a 40% excise tax on cigars brought into Massachusetts.

In order to evade tobacco taxes, Afeez made regular purchases of loose smoking tobacco and smokeless tobacco from a distributor in Pennsylvania where these tobacco products are not taxed. Afeez and a co-conspirator repeatedly drove bundles containing more than $10,000 in cash to the distributor for payment.

The illegal tobacco business generated over $448,000 that Afeez failed to report on his business’ income tax return for 2015.

The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. The charge of subscribing to a false income tax return provides for a sentence of no greater than three years in prison, one year of supervised release, and a fine of $100,000.

Acting United States Attorney William D. Weinreb and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Stephen Heymann of Weinreb’s Economic Crimes Unit is prosecuting the case.

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