Six indicted in federal cigarette smuggling case
WINCHESTER – A federal grand jury in the Northern District of West Virginia has indicted six people on charges of smuggling cigarettes illegally from Virginia to the New York City area.
Federal, state and local law enforcement officials at a news conference Monday announced the indictments of Mohamed Abdo Elbarati, 30, of Winchester; Amir Mohamed Alsaidi, 37, of Baltimore; and Farouk Mohamed Aldaylam, 28, Fahd Hamood Aljahaf, 37, Galal Hameed Kassim, 29, and Muneer Kaid Khaled, 25, all of New York City, on one count of conspiracy to traffic in contraband cigarettes.
Elbarati was also charged with four counts of transporting contraband cigarettes.
U.S. Attorney William J. Ihlenfeld II identified Elbarati, the owner of the Smoke Palace tobacco retailer at 1848 Berryville Pike, as the lead defendant.
A written statement from Ihlenfeld accused Elbarati of buying “millions of dollars worth of cigarettes from various wholesalers in the region, primarily with cash, before reselling them to out of state smugglers for a profit.”
The cigarettes from Virginia, which has one of the lowest cigarette tax rates in the nation, were taken to New York, which taxes cigarettes at a much higher rate.
Ihlenfeld said the cigarettes were transported through West Virginia, which was one of the reasons why his office is prosecuting the case instead of federal officials in Virginia or New York.
The investigation into cigarette smuggling has included raids conducted in mid-August at six businesses in the Winchester area, including Sheetz stores at 1574 Martinsburg Pike in Stephenson and 1503 North Frederick Pike; the Virginia Cigarette Outlet at 109 Hopewell Road and Discount Cigarette at 111 Hopewell Road; the Dollar Stretcher at 330 Welltown Road and the Olde Stone Truck Stop at 3425 Martinburg Pike.
Ihlenfeld said Elbarati made 130 deposits totaling more than $600,000 in a bank account from December 2014 through April, an example of the sums of money being made in cigarette trafficking.
“It appears the individuals in this case were doing pretty well,” Ihlenfeld said. “There are tremendous amounts of profits involved in this.”
Court documents state that Elbarati sold cigarettes in amounts ranging from 90,000 to 228,000 at various dates from Feb. 6 until April 8.
“The investigation showed this was primarily a cash business and the cigarettes were primarily acquired through cash,” Ihlenfeld said.
Asked about whether the investigation involved transactions in which undercover law enforcement officials either bought or sold contraband cigarettes, Ihlenfeld replied: “I’m comfortable saying today there was a tremendous amount of surveillance. There were search warrants that were executed. There were interviews that were conducted and there were a lot of records that were reviewed by our investigators and agents to determine the volume.”
Ihlenfeld said federal authorities, as part of any sentences that may be imposed on the defendants, intend to use the government’s asset forfeiture program to claim defendant property linked to any of the alleged offenses.
Ihlenfeld refused to say how any money obtained from property sold under the asset forfeiture program may be divided up among law enforcement agencies.
The agencies participating in the investigation were identified as the Department of Homeland Security Investigations; the Frederick County Sheriff’s Office; the Virginia Office of the Attorney General; the Virginia Alcohol and Tobacco Tax and Trade Bureau; the West Virginia State Police; the New York Department of Taxation and Finance; the FBI; and the Internal Revenue Service.
Ihlenfeld said law enforcement officials are conducting several other investigations into cigarette smuggling in the area.
“This is something that is going to continue, and it’s very likely we’ll be back before you in the near future with other cases like this to talk to you about,” he said.
Contact staff writer Joe Beck at 540-465-5137 ext. 142, or email@example.com