DOVER, Del. — A man arrested in Delaware in the takedown of an alleged East Coast cigarette smuggling ring that authorities believe may have funneled money to terrorist groups is being held on $12.5 million cash bail.

Adel Abuzahrieh of Staten Island, N.Y., is being held Friday at the Sussex Correctional Institute in Georgetown, two days after troopers arrested the 47-year-old during a traffic stop on Route 1 near Milford. Police say they found 201 cases of cigarettes in the box truck he was driving and seized between $15,000 and $20,000 in cash.

Abuzahrieh is awaiting extradition to New York.

The two reputed leaders of the smuggling ring, brothers Basel and Samir Ramadan, remain in custody at the Worcester County, Md., jail after being arrested Wednesday.

by Mary Murphy, Reporter

NEW YORK (PIX11) –  PIX11 News reported more than eight years ago about links between cigarette smuggling and the financing of  terrorism.

In 2004, we secured undercover surveillance tape of New York State agents monitoring a warehouse operation between Northern Virginia and New York  City.  The suspects — later convicted — used to make weekly trips from the Virginia warehouse, carrying 50,000 cartons in their rental trucks.  At the time, they could buy a carton of cigarettes in Virginia for $20, instead of the $75 it then cost in New York.  The smugglers cleared $2 million in profits  with every load.

The first bombing of the World Trade Center in 1993 was said to be partially  financed by cigarette smuggling. One of the convicted bombers, New  Jersey-educated chemical engineer Nidal Ayyad, was linked to a smuggling scheme in Bay Ridge, Brooklyn.

The young men arrested in the Lackawanna 6 case  in upstate New York — convicted of training in Al Qaeda terror camps overseas — were said to have had their trips financed by a cigarette smuggler from Buffalo.

One of the first cases prosecuted in the United States linking cigarette  smuggling to terrorism involved two brothers in North Carolina, who were convicted of funneling millions of dollars to Hezbollah, the Lebanese-based  terror group.

In the latest smuggling case announced Thursday here in New York City, some  of the 16 Palestinian-born men accused in the conspiracy were said to have ties  to Hamas, the terror group that runs the Gaza Strip.  One of them was a big supporter of  Omar Abdel Rahman — a blind Egyptian sheik doing life in  prison — convicted of conspiring to blow up New York City landmarks in the early 1990’s.

From: New York Daily News

Some of the arrested have links to Omar Abdel-Rahman, the blind sheik, and Rashid Baz, who opened fire on a van of Yeshiva students on the Brooklyn Bridge, killing Ari Halberstam. ‘We’re concerned because similar schemes have been used in the past to help fund terrorist organizations like Hamas and Hezbollah,’ says Police Commissioner Raymond Kelly.

By Greg B. Smith

Authorities fear a regional cigarette smuggling ring was funneling a fortune to terrorist groups in the Middle East, the city’s top cop said Thursday.

“While it hasn’t been established yet where the illicit proceeds ended up, we’re concerned because similar schemes have been used in the past to help fund terrorist organizations like Hamas and Hezbollah,” Police Commissioner Raymond Kelly said.

Kelly aired his concerns as state Attorney General Eric Schneiderman announced that 16 people — all Palestinian nationals — have been hit with enterprise corruption and other charges for allegedly flooding the market with more than a million cartons of tax-free cigarettes.

“By cheating New Yorkers out of tens of millions of dollars in tax revenue, this dangerous criminal ring was able to generate astounding profits that we are  still continuing to trace,” Schneiderman said.

All the suspects are being held without bail and face anywhere from eight to 25 years in state prison if convicted.

Jefferson Siegel/In total 16 people, all Palestinian nationals, were charged  in the operation.

The reputed ringleader was identified as Asel Ramadan, 42, of Ocean City, Md. Three handguns and $1.4 million in cash that was stuffed into black garbage bags was seized at his home, officials said.

Ramadan’s 40-year-old brother, Samir, was also busted. Together they allegedly stashed more than $55 million in ill-gotten gains in banks in and around Ocean City, and then used some of the dough to buy more cigarettes.

Also collared was Muaffaq Askar, 46, a Brooklyn man who Kelly identified as  a “close associate” of Rashid Baz, who is serving a 141-year prison sentence for firing on a van filled with Yeshiva students on the Brooklyn Bridge in 1994 and killing 16-year-old Ari Halberstam.

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Police also nabbed 52-year-old Youssef Odeh of Staten Island, a vocal  supporter of Omar  Abdel-Rahman, the blind sheik now serving a life sentence for his role in a foiled 1993 plot to blow up New York landmarks.

Jefferson Siegel/The gang allegedly bought cigarettes  from Cooper Booth Wholesale Inc., a wholesaler in Virginia, and then would  drive them to New York for illegal sales, say authorities.

Odeh is also close to Ahmed Sattar, the sheik’s interpreter, who is serving time for his role in smuggling Abdel-Rahman’s “messages of hate” out of  prison.

Though none of the 16 was charged with terrorism, sources said police were investigating whether some of the $10 million in profits the group netted wound up in the hands of Hamas, the Islamist group that controls the Gaza Strip and  has vowed to wipe Israel off the map.

Investigators said the ring worked like this:

The Ramadan brothers bought cigarettes from Cooper Booth Wholesale Inc., a  wholesaler in Virginia, and stored them at a public storage facility in Delaware.

Then, several times a week, 42-year-old Adel Abuzahrieh of Brooklyn would  drive down from New York City to buy cigarettes from the brothers.

Jefferson Siegel/The  alleged accomplices have been  under surveillance by the state Organized Crime Task Force and NYPD for months.

Abuzahrieh, who was also arrested, hauled back about 20,000 cartons a week,  which were then distributed by other members of the ring and sold untaxed at  Arab markets and grocery stores in Brooklyn, Staten Island, Queens and the  Bronx.

In the process, the ring managed to dodge $80 million in taxes, prosecutors  said.

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Cops have been warning for years that cigarette smugglers have been sending  some of their profits to Hamas and other terrorist groups overseas.

The Ramadan brothers and their alleged accomplices have been under surveillance by the state Organized Crime Task Force and NYPD for months, and  search warrants were executed up and down the East Coast.

Murray, Ken, New York Daily News/One of the arrested was someone Kelly  called a “close associate” of Rashid Baz, now serving 141 years for firing on a  van filled with Yeshiva students and killing Ari Halberstam,16-year-old Brooklyn  Yeshiva student  in 1994.

Odeh, an alleged distributor, first surfaced years ago as a supporter of Abdel-Rahman and Sattar.

After the sheik was convicted in 1995, Sattar called the verdict “very sad, absurd and fearful for the future of Muslims in this country. There will be a backlash.”

Seven years later, Sattar was charged with acting as the jailed sheik’s messenger, helping him spread what prosecutors called his “message of hate” across the world.

In one of the fatwas Sattar smuggled from his cell in Minnesota, the sheik exhorted followers to “kill (Jews) whereever they are.”

Eight other Brooklyn men were charged: Ahmad Abdelaziz, 42, Mufeed Attal, 62, Saad Badr, 58, Munther Mahmoud, 52, Izzat Nimer, 46, Issa Sulieman, 44, Bassam  Twam, 47, and Mohammad Seif, 39.

Also charged were Murad Bisharat, 37, of Ridgewood, Queens, Ribhi Awadeh,  39, of Guttenberg, N.J., and Mohamed Awanda, 47, of North Bergen, N.J;

PROVIDENCE — A federal magistrate judge Tuesday ordered two men charged with being part of an interstate cigarette smuggling ring held without bail.

Magistrate Judge Lincoln D. Almond denied a bail request by Wissam Khalil and continued a hearing for his brother, Bassam Khalil.

In Wissam Khalil’s case, Almond cited the fact that Wissam Khalil was on bail from an April 2012 state cigarette smuggling charge when he was indicted on the federal smuggling charges last week.

Bassam Khalil’s status hearing was continued to give him time to hire a lawyer.

Federal investigators charge the pair were part of a six-member ring that smuggled about 6 million cigarettes into the state from Virginia, costing Rhode Island $1 million in lost taxes in 2012-13.

HENRICO, Va. (WTVR)–On the 7500 block  of Woodman Road in Henrico, most neighbors have been there for decades, and most yards are kept in pristine condition, in all but one house.

Neighbors say the house has only been occupied a few months. Sheets went up to over the screens on the back porch almost immediately and vans transporting large boxes come and go frequently.  But on Friday more than the length of the grass drew neighbor’s attention to the house.

“I was on my way home and I see these cop cars here on Woodman Road., there’s a cop car in the driveway and in the street as well,” said neighbor Deborah Battle.

Friday afternoon a neighbor saw a break-in in progress at the home and quickly called police, which resulted in three suspects being arrested for breaking and entering. Today police went back with a warrant and say that “other criminal activity was uncovered” at the home.

Police seized numerous cartons of cigarettes of various brands. CBS 6 found two men in the driveway of the searched home this afternoon and asked about the police presence and cigarettes. But after refusing to answer our questions, the men quickly drove away in a van. Neighbors say they’re grateful the ordeal is over.

“When neighbors are concerned for neighbors and they see something suspicious and report it than it’s very helpful for the neighborhood in general,” said Battle.

Cigarette smuggling brings in top dollar; a $4.50 pack of cigarettes in Virginia will sell in New York City for about $13. Sales by the carton quickly add up to thousands, even millions in net from illegal smuggling.

This investigation is in the early stages, and ongoing, therefore no additional specifics may be released at this time in order to not compromise the investigation and aid in the prosecution, said Lt. C.J. Maurice.

This is a developing story…

By Greg Madison

If  you think you’re in the wrong line of work, and barely making ends meet, maybe  what you should be doing is running cigarettes  north along the I-95 corridor, from Virginia to New York.

No,  seriously – because some enterprising individuals have a lucrative sideline  doing just that.

The  Bureau of Alcohol, Tobacco, and Firearms has even put an exact number on just  how lucrative.

Abdullah Alnahahs, 36, of Cranston, is among seven men caught in a sweep by federal agents.

ByMark Schieldrop

They drove to Virginia, bought tens of thousands of dollars worth of cigarattes each with a 35 cent per pack tax in that state, brought them back to Rhode Island with its $3.50 per pack tax and made huge profits.

That’s the crux of a indictiment that alleges seven men, including a 36-year-old Cranston man, carried out a scheme to sell cigarettes they bought in Virginia here in Rhode Island, costing the state millions in lost tax revenue.

Federal officials swept through multiple locations across the state on Wednesday and recovered about $100,000 cash, business records, four vehicles and other items associated with the trafficking operation.

“As alleged, today’s indictment has taken down a wide-ranging, complex interstate criminal enterprise,” U.S. Attorney Peter Neronha said in a prepared statement. “Members of this enterprise, often under the cloak of purportedly legitimate businesses, used any means possible to steal more than a million dollars from Rhode Island taxpayers. The means varied – cigarette smuggling and corresponding evasion of Rhode Island cigarette taxes, social security fraud, and food stamp fraud – but the result was the same.”

The indictment charges Wissam Khalil, 40, of Central Falls, a Providence convenience store owner; his brothers Bassam Khalil, 48, and Najd Khalil, 25, of Pawtucket; Abdullah Alnahas, 36, of Cranston, a Providence convenience store owner; Bassam Kiriaki, 45, a Pawtucket accountant; and Richard Larrain, 23, of Providence, an enlisted soldier in the U.S. Army Reserves, with allegedly participating in a conspiracy to possess, transport, and distribute contraband cigarettes in Rhode Island.

A seventh defendant, Valeria Mendez (Khalil), 30, of Central Falls, wife of Wissam Khalil, is charged with conspiring to make and making false statements to a government official.

According to the indictment and/or information presented to the court, it is alleged that the conspiracy, which allegedly began as early as July 2011, included the creation of several “shell” corporations in Virginia and the rental of vacant retail storefronts in Virginia for the stated purpose of purchasing and reselling cigarettes in Virginia. The cigarette packages purchased included Virginia tax stamps, reflecting a Virginia tax of 35 cents per package.

According to information presented to the court, between July 2011 and continuing until this week, more than 30,000 cartons (six million) of cigarettes valued at more than $1.2 million were purchased in Virginia and shipped to Rhode Island in a truck bearing Rhode Island War Veteran Plates. It is alleged that on numerous occasions, the truck was driven by Richard Larrain while he was wearing his United States Army uniform. It is alleged that he wore his Army uniform in an effort to gain favor and avoid law enforcement detection.

It is alleged that the cigarettes were distributed and sold in Rhode Island at or near full-retail price, including a tax payment of $3.50 per package. It is alleged that the lack of payment of the cigarette tax to the state of Rhode Island resulted in a loss of approximately $1.05 million  of tax revenue.

The indictment alleges that as part of the investigation, on March 30, 2013, Najd Khalil was stopped by Virginia State Police as he allegedly drove from Rhode Island to Virginia in a rental vehicle in which he allegedly concealed $30,000 in cash. It is alleged that the cash, seized by Virginia State Police, was to have been used to purchase cigarettes in Virginia for resale in Rhode Island. The indictment alleges that Bassam Kiriaki, Wissam Khalil, and Richard Larrain conspired to create a false IRS Form 8300, “Report of Cash Payment over $10,000 Received in Trade of Business,” which they allegedly backdated to March 25, 2013, and provided to Virginia State Police in an effort to persuade Virginia State Police to return the $30,000.

The indictment also alleges that between February 7 and February 26, 2013, Bassam and Wissam Khalil allegedly conspired to make false statements to a customer service representative of the U.S. Social Security Administration about the travel of their father. It is alleged that they conspired to make false statements that their father had not traveled outside the United States for a calendar month or 30 consecutive days since February 1, 2011. Information presented to the court alleges that the father, who collects Social Security disability benefits, had actually resided outside the United States.

It is also alleged in the indictment that Wissam Khalil and Valeria Mendez (Khalil), 31, of Central Falls, wife of Wissam Khalil, conspired to make false statements to a program specialist of the U.S. Department of Agriculture (USDA) Food and Nutrition Service, stating that Valeria Mendez was not related to Wissam Khalil. On March 7, 2012, Valeria Mendez allegedly completed a Supplemental Nutrition Assistance Program Application for a Providence convenience store identifying herself as the owner. She left blank questions about her relationship, if any, to the previous two owners, Wissam Khalil and his father. When questioned by a USDA program specialist, Valeria Mendez allegedly denied knowing Wissam Khalil and allegedly stated that she resided with her parents in Providence.

An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

The case is being prosecuted by Assistant U.S. Attorney William J. Ferland

The matters charged in the indictment were investigated by the Rhode Island State Police, Federal Bureau of Investigation, Internal Revenue Service Criminal Investigations, United States Social Security Administration Office of Inspector General-Office of Investigations, Homeland Security Investigations, and the U.S. Department of Agriculture Office of Inspector General.

United States Attorney Peter F. Neronha also acknowledged and thanked the Virginia State Police, the Virginia Department of Attorney General, the Virginia Division of Taxation, the Rhode Island Department of Attorney General, the Rhode Island Division of Taxation-Excise Tax Compliance Unit, and the Cranston and Providence Police Departments for their assistance in this investigation.

Allegedly sold $1.2 million in illegal cigarettes

By Dan McGowan, WPRI.com Reporter

PROVIDENCE, R.I. (WPRI) – Seven individuals were arrested Wednesday in connection with an alleged cigarette trafficking conspiracy that resulted in the sale of more than $1.2 million in illegal cigarettes, according to the U.S. Attorney’s Office.

The indictment came after scores of state and federal law enforcement agents raided ten businesses and residences across the state Wednesday morning. Officials said they recovered approximately $100,000 in cash as well as business records and four vehicles allegedly connected to the trafficking operation.

“As alleged, today’s indictment has taken down a wide-ranging, complex interstate criminal enterprise,” U.S. Attorney Peter Neronha said in a prepared statement. “Members of this enterprise, often under the cloak of purportedly legitimate businesses, used any means possible to steal more than a million dollars from Rhode Island taxpayers. The means varied – cigarette smuggling and corresponding evasion of Rhode Island cigarette taxes, social security fraud, and food stamp fraud – but the result was the same.”

According to the indictment, the smuggling scheme involved sending people to Virginia to purchase cigarettes at a discounted rate and then reselling them in the Ocean State. In March, one of the individuals arrested, 25-year-old Najd Khalil, was allegedly in possession of $30,000 in cash when he was stopped by the Virginia State Police. Officials believe the money was going to be used to buy cigarettes in bulk.

Others arrested in connection with the investigation include:

Wissam Khalil, 40, of Central Falls; Bassam Khalil, 48, of Pawtucket; Abdullah Alnahas, 36, of Cranston; Bassam Kiriaki, 45, of Pawtucket. Richard Larrain, 23, of Providence; Valeria Mendez, 30, of Central Falls.

Wissam Khalil and Alnahas are storeowners in Providence.

Officials allege Larrain’s role in the elaborate scheme involved him driving vehicles with Rhode Island War Veteran license plates and wearing his United States Army uniform to avoid attention from law enforcement.

The indictment alleges that between July 2011 and last week, the traffickers purchased more than 30,000 cartons of cigarettes in Virginia to ship to Rhode Island.

The cigarettes purchased carried Virginia tax stamps, which are taxed at just 35 cents per package. In Rhode Island, where tobacco taxes are $3.50 per pack, the cigarettes were sold at close to market value, costing the state more than $1 million in lost tax revenue.

Cigarette smuggling is a common crime in Rhode Island, which has the second-highest tobacco tax in the United States behind New York. In January, the Washington D.C.-based Tax Foundation issued a report that found that nearly 40% of all cigarettes sold in the state were illegally purchased in other states.

At 39.8%, the report ranked Rhode Island fifth in the country for smuggling rates in 2011, behind only Washington, New Mexico, Arizona and New York, which tops the list at 60.9%. The Ocean State ranked first in smuggling in 2006.

Despite crackdown, bootleg smokes still on rise, especially in Eastern Canada

Contraband tobacco is still a big problem in Canada, says a group partly funded by businesses that make or sell cigarettes.

Despite new powers given police to crack down on contraband dealers, sales of bootleg smokes are on the rise in Atlantic Canada, the National Coalition Against Contraband Tobacco said Tuesday at an Ottawa news conference.

The coalition said criminal organizations in Ontario and Quebec have also adapted to new laws designed to curb the problem.

“The Canadian, Ontario and Quebec governments have all given police new powers to investigate and charge those that traffic in the trade,” said coalition spokesman Gary Grant.

“But the illegal cigarette industry continues to evolve to compensate.”

The coalition, which is backed by convenience stores, retailers, tobacco manufacturers and growers, among others, says it’s awaiting an extensive anti-contraband report from the RCMP.

That report, reviewing the state of contraband since 2008, was expected to be released by the end of last year.

In the absence of concrete data from the Mounties, however, the coalition said contraband smuggling and production is on the rise in the Atlantic provinces, while some reductions have been seen in Quebec.

“We use our sources and all our colleagues (to gather information), including the RCMP, which are still effective in providing statistics,” said Grant.

Senate committee review starts this week

A Senate committee will review legislation Wednesday, which was introduced by the Conservatives in March, to toughen penalties for selling contraband tobacco.

Bill S-16 would set mandatory minimum sentences for anyone convicted of trafficking in contraband tobacco under a new Criminal Code offence. If it becomes law, it would also create a new, 50-member, RCMP anti-contraband force.

The aim of the force, is to have a “measurable impact” on reducing contraband tobacco and combating organized crime networks, the government said when the legislation was introduced.

The maximum penalty for a first offence would be six months imprisonment for a summary conviction and up to five years for an indictable offence.

But police need even more powers to combat the contraband trade, said Grant.

The coalition also urged all levels of government to find ways of co-operating with First Nation communities to tackle the problem, accusing “criminals” in aboriginal communities of harming their own people.

“These organized criminals are victimizing our kids and starting a whole new generation of smokers,” said Grant.

Critics, however, say the proposed law has nothing to do with preventing health problems related to smoking and everything to do with the revenue lost by businesses and governments through the contraband trade.

Last week, the Mohawk Council of Akwesasne said it received a $476,115, two-year grant from the Ontario government to better regulate tobacco production.

“The Mohawk Council of Akwesasne has been working with the government of Ontario for the past year to build a more co-operative relationship around common interests,” said Grand Chief Mike Mitchell.

But the council complained that it was not consulted by Ottawa before Bill S-16 was drafted.

By Maria Arkouli

The bulk tobacco ban of 2013, reminds of the ban imposed in Greece 130 years ago as the country’s financial crimes squad SDOE is again trying to crack down on the elusive crime of tobacco smuggling, which has a long history in the country.

Tobacco differs from other products, such as potatoes or tomatoes, which are placed on the market outside the circuit of intermediaries, because its use requires special processing and preparation, as well as because it is a product subject to special taxation, which has given it a different place in the Greek society.

The prosecution of illegal smokers has its own episodic and sometimes, tragicomic history. On April 27, 1883, the Charilaos Trikoupis’ government, in a desperate search for revenue, imposed a tax on tobacco for the first time and abolished its sale in bulk.

Tobacconists hung black flags on their stores and urged his defeat in the next elections. Tobacco smuggling started with rolling papers because at that time, there was no black market of rolling papers, equivalent to that of tobacco.

Greek smokers were using letter papers and newspapers, rolling and smoking everything and in every way they could, as the disposal of cigarette papers had already become a state-monopoly. The strict tutelage of smoking products lasted until the end of 1985, while in some difficult periods of the Greek history, a rolled cigarette gave away a person’s political leaning.

In 1927, tobacco producers were especially privileged with the right to use – for personal use only – a special pink-colored rolling paper. But police were raiding cafes and remote villages searching for perpetrators of smuggling or illegal smokers. The first years of the prosecution the police were paid a bonus of 25 drachmas for every illegal smoker they arrested. Some smokers of smuggled tobacco were eating the guilty pink papers in order to avoid the arrest by the persistent policemen, who were even making body searches.

And although the modern bulk tobacco smuggling prefers to use airtight plastic bags, the modern pursuers, instead of their pockets, are able to detect unusual movements in their bank accounts.

Bulk tobacco prices in the black market range from 20 to 40 euros per kilo. But even with the price of 15 euros for just 200 grams, the comparison with the legal product shows the advantage of the smuggled tobacco dealer: a standard package of legal trade includes 18-20 grams of tobacco and is placed in the market in the minimum price of 4 euros, i. e, a more than double price in comparison to the bulk product, which remains attractive to a public who is urgently looking for cheap rolling tobacco.

According to SDOE estimates, the black market of bulk tobacco possibly includes many individual amateur traders of short range and not organized smuggling rings. Nevertheless, agents are planning to check bank accounts in order to prevent the spread of the phenomenon.

The tobacco companies, who are trading both ready-made cigarettes and rolling papers, are concerned too. Nikitas Theofilopoulos, Chief Executive Officer of Papastratos, the company which undertook the initiative for the campaign against the smuggled bulk tobacco, said: “The citizens should become aware. They should understand that those who sell illegal cigarettes and bulk tobacco are members of criminal organizations, who are making huge profits and deprive jobs from an industry that employs 500.000 workers and contributes about 7% of the country’s revenue”.

May Samourka, Communications Manager at Japan Tobacco International, points out that, “The changes on taxation led to an increase of 1 euro for a package of 20 grams of tobacco; while we should mention that the consumer of rolling tobacco is also incurred with the cost of at least 0.50 euros for filters and rolling papers.”

He said that, according to the company’s estimations, consumption has fallen 11.4 percent for cigarettes and 12.8 percent on tobacco. In parallel, the illegal cigarette market is blooming as, according to measurements, in December 2012 it had already reached 17 percent of the market. Samourka said, “The exorbitant increase in tobacco prices, which is a result of its excessive taxation, is the main cause of the spread of the bulk tobacco trade”.