Worcester Businessman Pleads Guilty To Tobacco Tax Fraud

WORCESTER, MA—A Worcester man pleaded guilty on Thursday in connection with a scheme to defraud the Commonwealth of Massachusetts of tobacco excise taxes and submitting false tax returns.

Mohamed Afeez, 32, pleaded guilty to subscribing a false tax return and conspiracy, and sentencing is scheduled for Sept. 13.

Between approximately late 2014 and July 2016, Afeez operated a wholesale business in Worcester that sold tobacco products, including cigars, smoking tobacco and smokeless tobacco (such as snuff and chewing tobacco), as well as other non-tobacco items, to convenience stores, gas stations and other retail businesses.

Under state law, smokeless tobacco wholesalers must file an excise tax form monthly and pay a 210 percent excise tax on smokeless tobacco brought into Massachusetts. Cigar wholesalers must file an excise tax form quarterly and pay a 40 percent excise tax on cigars brought into Massachusetts.

According to the U.S. District Attorney, in order to evade tobacco taxes, Afeez made regular purchases of loose smoking tobacco and smokeless tobacco from a distributor in Pennsylvania where these tobacco products are not taxed. Afeez and a co-conspirator repeatedly drove bundles containing more than $10,000 in cash to the distributor for payment, said the release. Afeez's partner would drive the products to the Bay State, where Afeez sold them for wholesale without paying the taxes. The illegal tobacco business generated over $448,000 that Afeez failed to report on his business’ income tax return for 2015.

Afeez could face up to five years in prison, three years of supervised release and a fine of $250,000, for the conspiracy charges.

The charge of subscribing to a false income tax return could lead up to three years in prison and a $100,000 fine.