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A.G. Schneiderman Announces 198 Count Conviction Of Ring Leader In Massive Eastern Seaboard Unstamped Cigarette Trafficking Enterprise

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A.G. Schneiderman Announces 198 Count Conviction Of Ring Leader In Massive Eastern Seaboard Unstamped Cigarette Trafficking Enterprise

September 30, 2015 - 09:12
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A.G. Schneiderman Announces 198 Count Conviction Of Ring Leader In Massive Eastern Seaboard Unstamped Cigarette Trafficking Enterprise

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NEW YORK, NY -- Attorney General Eric T. Schneiderman today announced the conviction of Basel Ramadan, the ring leader of a criminal enterprise that flooded New York City, Albany County and Schenectady County with more than a million cartons of untaxed cigarettes illegally imported from Virginia. Basel Ramadan, 44 of Maryland, was found guilty on 198 counts, including Enterprise Corruption, Money Laundering, and numerous tax crimes by Brooklyn Supreme Court Justice Dineen A. Riviezzo. The nearly 10-week bench trial, which included evidence from hundreds of wiretaps, yielded a verdict of guilty, and the defendant now faces up to 8 1/3 to 25 years on Enterprise Corruption alone, and faces up to 30 years in prison on call 198 counts combined.  

“This individual led a criminal enterprise that stretched from Maryland to New York, flooded our state with millions of cheap cigarettes, and cheated New Yorkers out of tens of millions of dollars in tax revenue,” Attorney General Schneiderman said. “Not only did this enterprise put law-abiding businesses in New York at a competitive disadvantage, but it increased the possibility of violence that comes with any type of smuggling operation. I’m deeply gratified that justice has been served.”

Besides criminal activity, sales of non-taxed cigarettes deprive the state of millions of dollars in lost cigarette tax revenues, hurt law-abiding small businesses and undercut public health measures designed to discourage smoking.

Through the use of electronic surveillance, physical surveillance and the review and analysis of financial records in conjunction with other investigative tools, the Attorney General’s investigation revealed that Basel Ramadan and his brother obtained cigarettes from a wholesaler, Cooper Booth Wholesale, Inc., in Virginia and stored them in a public storage facility in Delaware. Several times a week, an alleged co-conspirator, Adel Abuzahrieh of Brooklyn, drove with tens of thousands of dollars in cash from New York to Delaware where he gave the Ramadans the cash in exchange for cigarettes. Beyond the $55 million in purchases to cigarettes, the Ramadans have generated more than $10 million in profits from their illegal activities. Abuzahreih’s case is still awaiting trial. 

Once the distributors took possession of the merchandise – approximately 20,000 cartons of cigarettes a week – they distributed it to the resellers, who in turn sold the untaxed cigarettes to a myriad of Arab markets and grocery stores in Brooklyn, Staten Island and New Jersey.

During a 12-month joint investigation by the Attorney General’s Organized Crime Task Force and the NYPD leading up to the indictment, law enforcement seized more than 65,000 forged NYC/NYS cigarette tax stamps that were not yet affixed to packs of cigarettes, and nearly 20,000 cartons of untaxed cigarettes. The investigation uncovered $55 million in illegal cigarette sales and seized three handguns from Ramadan.

In addition to the Ramadans, the enterprise consisted of several New York-based cigarette distributors, several New York-based cigarette resellers and Abuzahrieh, who allegedly transported cash, sometimes over $100,000 per trip, and cigarettes between New York and Delaware.

Ramadan was the leader of a 16 member criminal drug ring charged in May 2013 in a 244-count indictment with enterprise corruption, money laundering and related tax crimes. Six defendants have previously pleaded guilty, including Ramadan’s brother, Samir Ramadan. Samir Ramadan, 40, pleaded guilty to the top enterprise corruption charge in 2014, is serving a prison term of up to six years.

Further information about the enterprise corruption case is available here.

Other defendants who were allegedly involved, including five who are waiting trial, lived in Brooklyn, Staten Island and New Jersey.

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 said that all packs of cigarettes sold in New York City must bear a joint New York City/New York State tax stamp and only a licensed stamping agent can possess untaxed cigarettes and affix the tax stamps on the cigarette packs.

None of the members of this untaxed cigarette distribution and money laundering operation are authorized to sell tobacco products in New York City or New York State.

The case is being prosecuted by OCTF Deputy Bureau Chief Tarek Rahman and Assistant Deputy Attorney General James Cudden led by Deputy Attorney General Peri Alyse Kadanoff. The Executive Deputy Attorney General for Criminal Justice is Kelly Donovan.