New York Attorney General Eric T. Schneiderman and New York City Police Commissioner Raymond W. Kelly announced the indictment of 16 members of a criminal ring that flooded New York with more than a million cartons of untaxed cigarettes imported from Virginia.
The ring and/or associates, some with ties to terrorist organizations, allegedly used a storage facility in Selbyville, Del. as a shipment point.
Cigarette smuggling increased sharply after New York levied sharply higher taxes than surrounding states.
The Associated Press reported Delaware State police arrested Adel Abuzahrieh, 47 on Wednesday near Milford as the investigation wound down.
Delaware State troopers reported finding 201 cases of cigarettes in the truck he was driving. A large amount of cash was also found, the AP reported. He is reportedly being held in lieu of more than a $12 million bond
A release from the New York Attorney General’s office said such rings in the past helped fund organizations like Hamas and Hezbollah.
A 244-count indictment charges 16 co-conspirators with enterprise corruption, money laundering and related tax crimes. Each of the defendants faces up to 25 years behind bars.
During a 12-month investigation, 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, which has so far uncovered $55 million in illegal cigarette sales, is continuing.
New York City Police Commissioner Raymond W. Kelly said, “The association of some of the suspects in this case to the Ari Halbestram’s killer, the Blind Sheik and a top Hamas official concerns us. 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.”
As search warrants were executed, investigators seized three handguns from ring-leader Basel Ramadan. The Attorney General’s Office also grabbed $1.4 million stashed throughout Ramadan’s Ocean City, Md. , residence, including stuffed into black plastic garbage bags. Investigator seized over 20,000cartons of cigarettes from defendants’ homes, cars and storage facilities in four states. They seized $200,000 in cash from defendants’ in New York City.
This joint investigation by the Attorney General’s Organized Crime Task Force and the New York City Police Department, and with the assistance of Homeland Security Investigations, uncovered the trafficking ring and its connections to Brooklyn, Queens, Staten Island, the Bronx, Albany, Schenectady and multiple other states, including Maryland, Delaware, Virginia and New Jersey.
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 the head of the enterprise, Basel Ramadan, and his brother, Samir Ramadan, obtained cigarettes from a wholesaler, Cooper Booth Wholesale, Inc., in Virginia and stored them in a public storage facility in southern Delaware. Several times a week, 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 illegal activities, prosecutors said.
In addition to the Ramadans, the enterprise – all of whose members are Palestinian – consisted of several New York-based cigarette distributors, several New York-based cigarette resellers and Abuzahrieh, who transport of cash, sometimes over $100,000 per trip, and cigarettes between New York and Delaware.
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, Queens, the Bronx and Staten Island. One of the resellers, Mohannad Seif, also resold the untaxed cigarettes to various grocery stores in Albany and Schenectady Counties.The sales tax revenue lost to New York State is estimated to be significantly in excess of $80 million.
The Ramadan brothers deposited more than $55 million from their untaxed cigarette sales into small local financial institutions in and around Ocean City, MD., and used that money to purchase additional cigarettes for illegal sale.
Among the agencies involved in the probe were the Delaware and Maryland State Police Departments; and the United States Attorney’s Offices in Delaware and Maryland.