California Attorney General Rob Bonta on Thursday announced the grand jury indictment of five suspects for selling tobacco without a license and committing tax fraud that cost the state of California more than $24 million in lost tax revenue.
The five suspects, Ramzi Ibrahim Saba, Osama Zakour, Banayotis Reda Haddad, Josef Friwat and Jeries Ayoub Dababneh were indicted on 118-counts of conspiracy, selling tobacco as an unlicensed distributor, filing false tax returns, money laundering and a white-collar enhancement, according to the attorney general’s office. The Sacramento County criminal grand jury indicted the five suspects on March 14.
“From the investigation to prosecution, my office is dedicated to seeing these five defendants pay for their crimes against the people of California,” said Bonta. “Schemes that defraud the government of millions in taxpayer money will not be tolerated. Today’s announcement should serve as a reminder: If you break the law and engage in fraud and theft, my office will hold you accountable.”
From January 2017 to April 2024, the attorney general’s office said the suspects allegedly engaged in the importation of untaxed tobacco products into California using shell entities, subsequently selling these products to customers in the state while evading the tobacco excise tax.
The operation involved a series of coordinated actions aimed at misusing personal and regulatory information, hiding the source of funds used for purchasing untaxed tobacco, concealing the arrival of tobacco shipments in California, misleading customers about compliance and avoiding obligations related to California’s tobacco excise tax.
“Tobacco taxes provide funding for medical research, childhood development, and tobacco-prevention programs for kids. They also pay for many other critical services that Californians rely on,” said California Department of Tax and Fee Administration Director Trista Gonzalez.
The five suspects perpetuated their scheme by submitting false monthly excise tax returns to the California Department of Tax and Fee Administration or, in some cases, neglecting to file these returns altogether, according to the attorney general’s office.
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The case was investigated by the California Department of Justice (DOJ), and the California Department of Tax and Fee Administration. It is being prosecuted by the DOJ, according to the attorney general’s office.
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