Tobacco Distributor Pleads Guilty To Aiding Tobacco Trafficking in Norwood

NORWOOD, MA — A Pennsylvania wholesale tobacco distributor has admitted to aiding and abetting untaxed shipments of tobacco products into Norwood and evading financial reporting requirements.

Kamlesh Patel, 60, was in U.S. District Court in Boston Thursday, where he pleaded guilty to aiding and abetting a Norwood-based customer to violate the Prevent All Cigarette Trafficking Act (PACT Act) and failing to report large cash transactions to the IRS, according to the U.S. Attorney's office. Sentencing has been scheduled for January 22 at 2:30 p.m.

Beginning in January 2013, Patel, through his companies RDK Distributors and MV Distributors, sold large quantities of tobacco products to a Norwood wholesaler, often worth more than $100,000 at a time. The Norwood wholesaler typically paid Patel for tobacco products in cash. To evade financial reporting requirements that would have notified the IRS of the size, nature, and income of the Norwood wholesaler’s business, Patel falsely divided among multiple invoices the bulk cash payments he received. Patel created and instructed his employees to record the large cash payments he received as if there had been numerous sales over numerous days among numerous companies, each less than $10,000, rather than the single sale for which he had received one or two sizeable cash payments, often amounting to more than $100,000 at a time, according to the U.S. Attorney's office.

Title 15 of the PACT Act requires people who sell, advertise for sale, transfer or ship for profit smokeless tobacco between states to file a statement with the Attorney General and the tobacco tax administrator in the states to which they ship their products. The PACT Act also requires them to file with the tax administrator a monthly record of each shipment of smokeless tobacco that they transport into the state.

Patel faces up to 10 years in prison, three years of supervised release, a fine of up to $500,000 and forfeiture for the charge of structuring cash transactions to evade financial reporting requirements and up to three yeas in prison, a year of supervised release, and a $250,000 fine for the charge of aiding and abetting violation of the PACT Act.

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