Woman pleads guilty to distributing contraband cigarettes

 

Date: January 31, 2020

Contact: newsroom@ci.irs.gov

ROCHESTER, N.Y. — Crystal King of the Akwesasne Mohawk Indian Reservation, pleaded guilty before U.S. Magistrate Judge Marian W. Payson, to distribution of contraband cigarettes. The charge carries a maximum penalty of five years in prison and a $250,000 fine.

The defendant worked with others to acquire "cut rag tobacco" which would be used to manufacture contraband cigarettes. Monies to purchase the cut rag tobacco were wired from Rochester, NY to CanStar International Inc., a tobacco broker, in the state of Florida. The cut rag tobacco was subsequently obtained from a tobacco distributor located in the state of North Carolina.

In October 2018, King directed that a shipment of cut rag tobacco be sent to individuals who the defendant knew were manufacturing and distributing unlicensed cigarettes on and from the Akwesasne Mohawk Indian Reservation, which is located in the Northern District of New York. On October 18, 2018, law enforcement officers stopped a pickup truck, towing an enclosed gray trailer, shortly after leaving the reservation. A search of the trailer located approximately 3,000,000 contraband cigarettes wrapped in plastic bags. None of the cigarettes bore a New York State tax stamp or other evidence of the payment of applicable New York State cigarette taxes. Under New York law, tax stamps are required on all cigarettes that enter the stream of commerce in New York State.

King admits that she knowingly assisted others in evading approximately $150,990 in federal excise taxes and $652,500 in New York State sales taxes related to the manufacture, possession and distribution of illegal contraband cigarettes.

The plea is the culmination of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge; Homeland Security Investigations - Border Enforcement Security Team, under the direction of Special Agent-in-Charge Kevin Kelly; Customs and Border Protection Air and Marine Unit, under the direction of Director Brian Manaher; the Alcohol and Tobacco Tax and Trade Bureau – Office of Field Operations, under the direction of Assistant Administrator Nicholas Colucci; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.

Sentencing is scheduled for April 30, 2020, at 12 p.m. before U.S. District Judge Charles J. Siragusa.