Hopkinton Man Sentenced In Multi-Million Dollar Tax Evasion Plot

HOPKINTON, MA – A Hopkinton man was sentenced Friday in federal court for federal income tax evasion and defrauding the state of millions in connection with a tobacco wholesale operation. Raza Ali, 56, was arrested and charged in December 2015 along with co-conspirators Kaleem Ahmad and Muhammad Saleem Iqbal.

The trio operated a wholesale business in Norwood under the names "Pick N Dip" and later "MSI Distributors." The company sold tobacco products, including cigars, cigarettes and smokeless tobacco, to retailers.

By law, smokeless tobacco wholesalers must file an excise tax form monthly and pay excise tax on smokeless tobacco brought into and sold in Massachusetts. Cigar and smoking tobacco wholesalers must file an excise tax form quarterly and pay excise tax on cigars and smoking tobacco imported to and sold in the state.

The US Attorney's office said Ali, Ahmad and Iqbal frequently purchased tens, and sometimes hundreds, of thousands of dollars of smoking tobacco, smokeless tobacco and cigars at a time in Pennsylvania, where no taxes are imposed. They then transported the products to Massachusetts in secret without filing the reports required and without paying excise taxes, according to the USAO.

They accepted accepted payments for the products primarily in cash, and made multiple bank deposits in amounts less than $10,000 cash to avoid being reported to the U.S. Treasury Department. They then regularly transported cash over $50,000 to Pennsylvania, where the money was used to purchase additional untaxed tobacco products, authorities said.

Ali pleaded guilty in May 2016 to one count of conspiring to commit wire fraud and launder money and one count of making a false statement on a federal income tax return. He was sentenced Friday to a year and a day in prison and two years of supervised release. He will pay a fine of $30,000, approximately $28 million in restitution to the state and forfeit all property involved in the offense, including a warehouse of tobacco products and over $160,000 seized during the case.

Ahmad was sentenced to two years in prison and Iqbal was sentenced to 42 months in prison.

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