Tobacco tax fraud scheme cost California more than $24 million in lost revenue, officials say

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Tobacco tax fraud scheme cost California more than $24 million in lost revenue, officials say

California's top prosecutor on Thursday said five people are accused of costing the state tens of millions of dollars in connection with a tobacco tax fraud scheme.| VIDEO ABOVE | California AG reminds consumers they can delete genetic dataAttorney General Rob Bonta announced that the group, in an operation that lasted years, brought in unlicensed tobacco and posed as licensed distributors to avoid California's tobacco excise tax. That resulted in the state losing more than $24 million in tax revenue.“From the investigation to prosecution, my office is dedicated to seeing these five defendants pay for their crimes against the people of California,” Bonta said in a news release. “Schemes that defraud the government of millions in taxpayer money will not be tolerated."California Department of Tax and Fee Administration Director Trista Gonzalez said tobacco taxes provide funding for several services, including medical research, childhood development and tobacco-prevention programs for children.Watch the full news conference in the video player belowA copy of the indictment lists Banayotis Reda Haddad, Ramzi Ibrahim Saba, Josef Friwat, Osama Zakour and Jeries Ayoub Dababneh as the defendants in the crimes that spanned multiple counties that include Sacramento, San Diego, Riverside, San Bernardino and Los Angeles counties. The five people face 118 counts of conspiracy, selling tobacco as an unlicensed distributor, filing false tax returns, money laundering and a white-collar enhancement. Multiple false tax returns in Sacramento County are also listed in the indictment.Read the full indictment here.Bonta said the group evaded taxes by bringing in unlicensed tobacco into California using shell companies that served as a front for the activities they wanted to keep concealed. Because the tobacco was unlicensed, Bonta said the five were able to avoid the tax California imposes on licensed distributors. They are also accused of hiding the source of funds they used for purchasing untaxed tobacco, concealing shipments into the state, misleading customers about compliance and avoiding obligations related to the excise tax.The group allegedly either submitted false tax returns to the state or none at all, "significantly compromising the integrity of its tobacco regulatory system."Bonta said this operation lasted from January 2018 to April 2024. A Sacramento County criminal grand jury indicted them on March 14.See more coverage of top Central Coast stories | Download our app / Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel

California's top prosecutor on Thursday said five people are accused of costing the state tens of millions of dollars in connection with a tobacco tax fraud scheme.

| VIDEO ABOVE | California AG reminds consumers they can delete genetic data

Attorney General Rob Bonta announced that the group, in an operation that lasted years, brought in unlicensed tobacco and posed as licensed distributors to avoid California's tobacco excise tax. That resulted in the state losing more than $24 million in tax revenue.

“From the investigation to prosecution, my office is dedicated to seeing these five defendants pay for their crimes against the people of California,” Bonta said in a news release. “Schemes that defraud the government of millions in taxpayer money will not be tolerated."

California Department of Tax and Fee Administration Director Trista Gonzalez said tobacco taxes provide funding for several services, including medical research, childhood development and tobacco-prevention programs for children.

Watch the full news conference in the video player below

A copy of the indictment lists Banayotis Reda Haddad, Ramzi Ibrahim Saba, Josef Friwat, Osama Zakour and Jeries Ayoub Dababneh as the defendants in the crimes that spanned multiple counties that include Sacramento, San Diego, Riverside, San Bernardino and Los Angeles counties.

The five people face 118 counts of conspiracy, selling tobacco as an unlicensed distributor, filing false tax returns, money laundering and a white-collar enhancement. Multiple false tax returns in Sacramento County are also listed in the indictment.

Read the full indictment here.

Bonta said the group evaded taxes by bringing in unlicensed tobacco into California using shell companies that served as a front for the activities they wanted to keep concealed.

Because the tobacco was unlicensed, Bonta said the five were able to avoid the tax California imposes on licensed distributors. They are also accused of hiding the source of funds they used for purchasing untaxed tobacco, concealing shipments into the state, misleading customers about compliance and avoiding obligations related to the excise tax.

The group allegedly either submitted false tax returns to the state or none at all, "significantly compromising the integrity of its tobacco regulatory system."

Bonta said this operation lasted from January 2018 to April 2024. A Sacramento County criminal grand jury indicted them on March 14.

See more coverage of top Central Coast stories | Download our app / Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel

Tobacco tax fraud scheme cost California more than $24 million in lost revenue, officials say

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