Tax Department Raids Twelve Capital District/Hudson Valley Businesses for Possessing Untaxed Cigarettes for Sale
“Roll-your-own” investigations yield ten arrests, untaxed cigarettes, equipment and records
For Release: Immediate, Thursday, April 25, 2013
Contact: Geoffrey Gloak, 518-457-7377
The New York State Department of Taxation and Finance today announced the arrest of ten individuals in the Capital District and Hudson Valley regions for illegally possessing untaxed cigarettes and untaxed tobacco.
The ten - all employees or owners of roll-your-own (RYO) cigarette outlets - are alleged to have possessed quantities of pre-rolled, untaxed cigarettes that were to be offered to the general public for sale, in violation of the New York State Tax Law. There were no immediate arrests at two of the twelve locations raided, though evidence was seized at those stores.
Earlier this year, undercover investigators with the Tax Department made purchases of untaxed, pre-rolled cigarettes at each of the twelve locations at issue.
Because cigarette taxes were not prepaid as required, these shops were able to sell cigarettes for as low as $35 a carton. When sold legally, cigarettes can cost as much as $100 a carton for premium brands.
"Avoiding taxes gives unscrupulous merchants an unfair advantage over business owners who comply with their tax responsibilities," said Commissioner of Taxation and Finance Thomas H. Mattox.
The Tax Department excecuted warrants at each of the twelve shops and seized records, equipment, unstamped tobacco products, and cash. The Department was assisted by the New York State Police, the Department of Homeland Security and several local police departments.
The ten individuals arrested were charged with crimes for the illegal possession of untaxed cigarettes for the purpose of sale, and/or possessing untaxed tobacco.
"As alleged, these defendants undercut other merchants, cheated the State out of tax revenue, and put at risk the stream of payments the State receives under the Master Settlement Agreement - payments that are vital toward funding healthcare and smoking prevention programs," Commissioner Mattox added.
The Master Settlement Agreement is an agreement between New York (and 45 other settling states) and the participating tobacco companies requiring the companies to pay roughly $800 million annually to the State to offset the financial costs associated with treating tobacco-related illnesses.
Following are the locations of the stores, items seized and individuals arrested (including charges):
- Tobacco House of Juan, Westgate Plaza, 911 Central Avenue, Albany; two RYO machines, one point of sale computer, 117 cartons of untaxed cigarettes, $11,000 in cash seized; Zhuying Chen charged with two class E felonies
- Tobacco House of Jin, 320 West Bridge Street, Catskill; one RYO machine, one point of sale computer, 34 cartons of untaxed cigarettes, $5,000 in cash seized; Ning Bao charged with a class A misdemeanor
- Tobacco House of Xin, 2100 Doubleday Avenue, Ballston Spa; business recently opened, seized 10 cartons of untaxed cigarettes, no arrests as yet
- Tobacco House of EA, 1892 Central Avenue, Colonie; two RYO machines, one point of sale computer, one vehicle, 140 cartons of untaxed cigarettes seized; Cai Lin charged with two class E felonies
- Tobacco Roll, 900 Ulster Avenue, Kingston; two RYO machines, 30 cartons of untaxed cigarettes and 335 pounds of untaxed tobacco seized; Xiao Ling Lui charged with two class A misdemeanors
- MYO Smokers Club, 130 Dolson Avenue, Middletown; two RYO machines, a hand roller, 20 cartons of untaxed cigarettes and 35 pounds of untaxed tobacco seized; Rong Jiang charged with two class A misdemeanors
- Tobacco House of ST, 711 State Route 17M, Monroe; two RYO machines, 53 cartons of untaxed cigarettes, 177 pounds of untaxed tobacco; no arrests - felony charges pending
- Tobacco House of C & W, 10 Orangetown Shopping Center, Orangeburg; two RYO machines, 104 cartons of untaxed cigarettes, 100 pounds of untaxed tobacco and $3,221 in cash seized; Bao Chai Wang charged with one class E felony and one class A misdemeanor
- Tobacco House of O.Y., 144 Ramapo Road, Garnerville; two RYO machines, 11 cartons of untaxed cigarettes and $7,122 seized; Xiu Ming Liu charged with one class A misdemeanor
- Tobacco House of Sheng, 738 Route 9, Fishkill; 94 cartons of untaxed cigarettes, 160 pounds of untaxed tobacco and $236 in cash seized; Min Xing Zhu charged with one class E felony and one class A misdemeanor
- Tobacco House of Jiang, 1488 Route 9, Wappingers Falls; 2 RYO machines, 117 cartons of untaxed cigarettes and 550 pounds of untaxed tobacco seized; Xu Zhei Jiang charged with one class E felony and one class A misdemeanor
- Tobacco House of Bao, 1418 Route 300, Newburgh; 82 cartons of untaxed cigarettes and 440 pounds of untaxed tobacco seized; Ming Xin Bao charged with one class E felony and one class A misdemeanor
The class E felony charges carry a maximum potential sentence of up to 4 years in state prison. The misdemeanor charges carry a maximum potential sentence of 1 year in jail.
A charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.