PITTSBURGH - Residents of Ohio and New York, along with two tobacco wholesale businesses in Sharon, Pennsylvania, pleaded guilty in federal court to charges of mail fraud and failure to file required reports with state revenue authorities, United States Attorney David J. Hickton announced today.
Raid Zaghari, 43, of Brooklyn, New York, USA Trading Corporation-I and USA Trading Corporation-V, both located in Sharon, Pennsylvania, pleaded guilty to mail fraud before United States District Judge Cathy Bissoon.
Tareq Alasadi, a/k/a Tareq Alasade, 41, of Youngstown, Ohio, pleaded guilty before United States District Judge Cathy Bissoon to failure to file a report setting forth the amount of tobacco product sold to a North Carolina distributor.
According to information presented to the Court at the guilty pleas by Assistant U.S. Attorney Stephen R. Kaufman, Zaghari, USA Trading Corporation-I and USA Trading Corporation-V used commercial interstate carriers for the purpose of executing a scheme to defraud. Non-cigarette tobacco, known in the industry as “other tobacco products" or “OTP," was sold by the defendants from their warehouse in Sharon, Pennsylvania, to distributors in New York and North Carolina, states that impose an excise tax on OTP. Pennsylvania is the only state in the nation which does not tax the wholesale distribution of OTP. In the mail fraud schemes, the defendants agreed not to report the sales to the taxing authorities in those other states, as required by law, which caused significant loss of tax revenue to the those states. USATC-I and USATC-V admitted that the loss was $3 million in taxes.
Alasadi failed to file, with the North Carolina Department of Revenue, the required notifications pertaining to the interstate distribution of taxable tobacco products to a customer in North Carolina by USATC-I.
Judge Bissoon scheduled sentencing for March 2, 2016 for Alasadi, March 9, 2016 for Zaghari, and April 7, 2016 for USA Trading Corporation-I and USA Trading Corporation-V. The law provides for a maximum total sentence of three years in prison, a fine of $250,000 or both for Alasadi and Zaghari. The law provides for a maximum total sentence of a term of probation, an order of criminal forfeiture, and restitution for USA Trading Corporation-I and USA Trading Corporation-V. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Shaun E. Sweeney is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives conducted the investigation leading to the charges in this case.
Source: U.S. Department of Justice, Office of the United States Attorneys
