Hopkinton tobacco seller sentenced for tax evasion
A Hopkinton man who ran what authorities said was a multimillion-dollar tax-evasion scheme has been sentenced to a year and one day in prison.
Raza Ali, 56, was sentenced July 14 by a U.S. District Court judge in Boston for evading federal income taxes and defrauding the state of millions of dollars in connection with the sale of cigarettes and other tobacco products.
Ali must pay $28 million in restitution to the state, as well as a $30,000 fine, and forfeit all property involved in the scheme, including a warehouse full of tobacco products and more than $160,000 seized during the investigation. He pleaded guilty last year after he was arrested with two others in December 2015.
Together, Ali and the other men - Kaleem Ahmad and Muhammad Saleem Iqbal, both of Sharon - ran wholesale businesses named Pick N Dip and MSI Distributors out of Norwood, selling tobacco products to convenience stores, gas stations and other retail businesses.
Wholesale tobacco sellers are required to pay excise taxes on tobacco brought into and sold in Massachusetts, according to the Department of Justice, which announced the sentencing. The three men evaded those taxes by repeatedly purchasing tens or hundreds of thousands of dollars worth of tobacco products at a time in Pennsylvania, where there are no such taxes levied, the office said. They then covertly brought the products into Massachusetts for resale without filing proper paperwork or paying excise taxes.
The defendants usually accepted payment for the tobacco products in cash, and then deposited them in banks in small enough amounts that they wouldn't trigger banks' reporting to the U.S. Treasury Department.
Ahmad was sentenced to two years in prison, and Iqbal was sentenced to 42 months in prison.
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