April 21, 2017

Worcester businessman pleads guilty to evading tobacco taxes

A Worcester businessman plead guilty to charges he defrauded the commonwealth of excise taxes on tobacco products and submitted false tax returns.

Mohamed Afeez, 32, who operated a wholesale tobacco products business in Worcester for almost two years, pleaded guilty to subscribing a false tax return and conspiracy in U.S. District Court in Boston, according to a Friday press release from the office of Acting U.S. Attorney William D. Weinreb.

Afeez's business sold tobacco products, including cigars, smoking tobacco, smokeless tobacco and non-tobacco items to convenience stores, gas stations, and other retail businesses between late 2014 and July 2016. State law requires smokeless tobacco wholesalers to file an excise tax form on a monthly basis, and pay a 210 percent excise tax on smokeless tobacco brought into the commonwealth. Cigar wholesalers have to file a quarterly excise tax form and pay a 40-percent excise tax on cigars brought into the state.

In an attempt to work around these requirements, Afeez bought loose smoking tobacco and smokeless tobacco from Pennsylvania, where those products are not taxed, according to the release. He and a co-conspirator drove bundles of more than $10,000 in cash to the distributor for payment on several occasions. A co-conspirator then drove the tobacco products to Massachusetts, where they were sold wholesale without paying excise taxes.

The illegal business generated more than $448,000 that was not filed on the business' 2015 income tax return, the U.S. Attorney's Office said.

Afeez faces up to eight years in prison, although actual sentences for federal crimes are usually less than the maximum penalties, according to the press release. Conspiracy can provide for a sentence of up to five years behind bars, three years of supervised release, and a $250,000 fine. Those found guilty of subscribing to a false income tax return can get up to three years in prison, one year of supervised release and a $100,000 fine.

His sentencing is set for Sept. 13.

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