A TWENTY ONE MILLION DOLLAR CIGARETTE TAX STAMP FRAUD INVESTIGATION RESULTS IN TWENTY TWO ARRESTS
THE OPERATION SEIZED OVER ONE HUNDRED AND FIFTY THOUSAND COUNTERFEIT
THE Multi-agency effort ALSO CONFISCATED 14 rifles, A PUMP ACTION shotgun,
AND FIVE SUSPECTED EXPLOSIVE DEVICES
Westchester County District Attorney Janet DiFiore, New York State Taxation and Finance Acting Commissioner Jamie Woodward and Yonkers Police Commissioner Edmund Hartnett announced that a year long investigation utilizing a multi-agency, multi-jurisdiction undercover operation carried out by the New York State Office of Tax Enforcement, Yonkers Police Department, New York City Police Department and Westchester County District Attorney’s office in which sales and purchases of more than nine million unstamped cigarettes resulted in a twenty one million dollar New York State cigarette excise tax stamp fraud and 21 individuals being arrested.
Also uncovered in the course of the investigation, an individual was arrested in the possession of five suspected home made explosive devices, fourteen rifles, a pump action shotgun and thousands of rounds of ammunition.
On multiple occasions the defendants spent over sixteen million dollars purchasing the unstamped cigarettes from undercover New York State Tax Investigators.
illegal purchases resulted in over twenty one million dollars of lost excise
and sales tax revenue to
The defendants, acting as middlemen, would then resell the unstamped cigarettes at a sizable profit to small businesses for individual sale.
The investigation was based on information, developed from a Confidential Informant by the Office of Tax Enforcement of the New York State Taxation and Finance Department, that the defendant’s were looking to illegally purchase cigarettes on the black market.
During the course of the investigation, the investigative team made contact with approximately 60 targets and represented they had access to unstamped cigarettes for sale.
All of the subjects have purchased illegal cigarettes, never paying the $42.50 excise tax or the sales tax on the cigarette cartons and never reporting the purchases or sales to the State. They would routinely purchase hundreds of cartons of unstamped cigarettes at a time.
The Felony charges that each may face can include:
charged in this investigation, for the first time, will be under new enhanced
Also charged is:
were executed at various locations in the New York Metropolitan Area resulting
in the closure of a fraudulent tax stamping operation being run out of a
storage facility in the
The stamping agent can then sell the cigarettes to wholesale or retail businesses.
To circumvent the excise taxes, and earn more profit on cigarette sales, some cigarette dealers illegally purchase unstamped cigarettes from unauthorized sources.
New York State Office of Tax Enforcement, Yonkers Police Department Intelligence Unit, New York City Police Department Intelligence Division, Westchester County Police Bomb Squad and Westchester County District Attorney’s office participated in various aspects of the investigation.
Arraignments are pending.
Burstell faces a maximum of seven years in state prison.
The other defendants face a maximum of eight and one third to twenty five years in state prison.
Assistant District Attorney Steven Vandervelden, Chief of the Organized Crime and Criminal Enterprise Bureau and Assistant District Attorney Michael Curti, of the Organized Crime and Criminal Enterprise Bureau, will prosecute the case.
in compliance with Disciplinary Rule 7-107A of the Code of
Professional Responsibility, you are advised that a charge is
merely an accusation and that a defendant is presumed
innocent until and unless proven guilty.