New York, NY - March 12, 2014 - Attorney General Eric T. Schneiderman and New York State Commissioner of Taxation and Finance Thomas H. Mattox today announced the arrest of a large-scale cigar distributor, Sulaiman Aamir, of Delta Distribution Services Corp. Aamir, a licensed tobacco distributor, and his Brooklyn-based corporation were charged with felony Criminal Tax Fraud and Offering a False Instrument for Filing after an investigation showed that Aamir, who owns and operates Delta, imported millions of cigars from Pennsylvania-based wholesalers and resold them in New York without paying New York taxes on the tobacco products. If convicted, the 45-year-old faces up to 25 years in prison.
The investigation, conducted by the Attorney General’s Organized Crime Task Force and the Department of Taxation and Finance, revealed that between September and November 2013, Aamir failed to pay at least $1.7 million in state tobacco taxes. In just that time period, electronic surveillance of cigar deliveries at Aamir’s 567 Union Street business showed he received close to 2 million individual cigars – with a wholesale value in excess of $2.2 million.
“By cheating New Yorkers out of millions of dollars in tax revenue, this tobacco distributor operated outside the law and was able to generate astounding profits that we are still continuing to trace,” Attorney General Schneiderman said. “This operation hurt law-abiding mom-and-pop shops and other businesses in New York by putting those who pay their taxes at a competitive disadvantage. It also directly undermines our public health efforts aimed at discouraging smoking.”
“This is an excellent example of intergovernmental cooperation aimed at finding and arresting an unscrupulous merchant who failed to comply with his tax responsibilities,” Commissioner Mattox said. “Today’s arrest should send a clear signal – we will continue to be diligent in uncovering and prosecuting such cases.”
Licensed tobacco distributors are required by law to remit a 75% tax on the wholesale price of all cigars sold, shipped, imported, manufactured, or delivered in New York. The payment must be made to the state Tax Department by the 20th of every month, along with a completed NYS Tax Form, called the MT-203. Aamir’s MT-203’s for the three-month span falsely reported and remitted $29,642.52 in tobacco taxes.
A search warrant was previously executed at the Brooklyn business, where investigators seized hundreds of thousands of individual cigars that had been delivered to the location that day. They also seized in excess of $9,000 in cash.
Aamir, of Staten Island, and his corporation were arraigned in Brooklyn Criminal Court today, and Aamir was held on $100,000 bail. They face charges of Criminal Tax Fraud in the First Degree and Offering a False Instrument for Filing in the First Degree. The charges against the defendants are accusations, and the defendants are presumed innocent until and unless proven guilty in a court of law.
Attorney General Schneiderman thanks the NYS Department Taxation and Finance for its work in this case.
The investigation was directed by the Attorney General’s Organized Crime Task Force (OCTF) Senior Investigators Mark MacConnell and John Flood. OCTF’s Supervising Investigator is Cheryl Munoz, and Christopher Vasta is the bureau’s Deputy Chief. The chief is Dominick Zarrella.
The investigation by the NYS Department of Taxation and Finance was directed by Senior Tax Investigator Kevin Barbitsch. Risa Sugarman is Deputy Commissioner of the NYS Tax Criminal Investigations Division, Chris Ammirati is the Director of NYS Tax Criminal Investigations, and Michael Spinosa is the chief of the NYS Tax Cigarette Strike Force.
The case is being prosecuted by Assistant Deputy Attorney General Brandi Kligman from the Attorney General’s Organized Crime Task Force, which is led by Deputy Attorney General Peri Alyse Kadanoff. OCTF is part of the Attorney General’s Criminal Justice Bureau, headed by Executive Deputy Attorney General Kelly Donovan.