U.S. Attorney Carla B. Freedman | U.S. Department of Justice
Jeffrey Doctor and Samuel Baker, both from North Carolina, have been sentenced for their roles in an international money laundering conspiracy involving the smuggling of cut rag tobacco into Canada. The sentences were handed down in Albany, New York. Doctor received a 14-month prison sentence, while Baker was sentenced to 30 months.
The announcement came from United States Attorney Carla B. Freedman; Erin Keegan, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI); and Harry Chavis, Acting Executive Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI), New York Field Office.
Both men had previously pleaded guilty to their involvement in the scheme that ran from approximately 2013 to 2016. They worked with others to acquire cut rag tobacco and smuggle it into Canada for use in making contraband cigarettes. These cigarettes were sold without paying taxes or duties, generating significant profits which were then used to purchase more tobacco for further smuggling.
Funds used to buy the tobacco were transferred from Canada through New York to North Carolina. The tobacco was then moved to warehouses and buildings across the Northeastern United States before being smuggled into Canada.
Baker admitted laundering over $19 million as part of this operation and agreed to forfeit $738,442 in proceeds from his crimes. He was also fined $100,000. Doctor admitted obtaining more than $503,850.66 in unrecovered proceeds and agreed to a money judgment forfeiture.
Senior United States District Judge Frederick J. Scullin Jr. imposed a two-year term of supervised release on both defendants following their imprisonment.
In related cases, Edgar M. Baker from Southern Pines, North Carolina received three years probation and a $75,000 fine after pleading guilty to misprision of a felony for failing to report the conspiracy once he became aware of it. Carey Terrance was previously sentenced to time served and fined $350,000 for his involvement.
The investigation involved HSI and IRS-CI along with Canadian agencies such as the Canadian Border Services Agency and Sûreté du Québec. Assistant U.S. Attorneys Allen J. Vickey and Alexander P. Wentworth-Ping prosecuted the case.
