KANSAS CITY, Mo. -- Eighteen defendants have been indicted by a federal grand jury in a more than $17-million, multi-state conspiracy to transport hundreds of thousands of cartons of contraband cigarettes from the Kansas City, Mo., area to the state of New York, where they were sold primarily on Indian reservations.
In addition to the federal indictment, the undercover operation by the Bureau of Alcohol, Tobacco, Firearms and Explosives resulted in a $3.5 million civil forfeiture and a non-prosecution agreement that requires a Winnebago, Neb. company to pay a $300,000 penalty.
"When unscrupulous companies traffic in contraband cigarettes, they are stealing from the public through millions of dollars in lost tax revenue," Tammy Dickinson, U.S. Attorney for the Western District of Missouri, said. "They also create an illegal and unfair advantage over legitimate businesses that follow the law. When they don't pay the excise tax on their cigarettes, they are able to unfairly undercut the prices charged by off-reservation retailers."
Craig Sheffler, 43, and his wife, Nicole Sheffler, 35, both of Independence, Kansas; Harry Najim, 65, of Wichita, Kansas; Teddy Frenchman, 39, of Winnebago, Neb.; AJ's Candy & Tobacco LLC and William F. Parry, 52, both of Irving, N.Y.; Tara Sundown, 48, of Basom, N.Y.; Philip Christ, 54, and Salvatore Tornabene, 44, both of Hamburg, N.Y.; Gerald E. Barber, 67, of Virginia; Mousa Juma, 62, of Chesapeake, Va.; T. Cameron Jones, 57, of Quilcene, Wash.; Gholamreza "Reza" Tadaiyon, 50, of Weston, Fla.; Payam Kheimehdooz, 42, of Miami, Fla.; Mohsen Rostami, 47, of North Lauderdale, Fla.; and David Bishop, 43, Mark Bishop, 39, and Piotr Hoffmann, 39, all of Montreal, Canada, were charged in a 44-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Aug. 12, 2013.
The federal indictment alleges that each of the defendants participated in a conspiracy to commit wire fraud and traffic in contraband cigarettes from July 2010 to Jan. 26, 2012.
According to the indictment, Craig Sheffler and Tadaiyon purchased more than $17 million worth of contraband cigarettes from undercover ATF agents during the undercover operation. Approximately 620,600 cartons of cigarettes--containing 10 packs per carton--were transported to New York without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in the state of New York. The total state excise tax lost to the state of New York was approximately $8.1 million.
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