Tax Fraud: Muhammad Saleem Iqbal Sentenced To Conspiring To Defraud Wholesale Tobacco Taxes and False Personal Income Tax Return
Sharon Man Sentenced for Tobacco Tax Fraud and Money Laundering
BOSTON – A Sharon man was sentenced today in U.S. District Court in Boston in connection with illegally selling tobacco products and laundering the proceeds.
Muhammad Saleem Iqbal, 53, was sentenced by U.S. District Court Judge William G. Young to 42 months in prison, two years of supervised release and restitution of $28,027,946. The Court also ordered forfeiture of hundreds of thousands of dollars in tobacco products and over $150,000 belonging to Iqbal and the tax-evading wholesale tobacco business in which he engaged. In May, 2016, he pleaded guilty to conspiring to defraud Massachusetts of wholesale tobacco taxes and to filing a false personal income tax return.
Iqbal and a business partner operated a wholesale business under the name “Pick N Dip,” in Norwood that sold tobacco products, including cigars 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% excise tax on smokeless tobacco brought into Massachusetts. Cigar wholesalers must file an excise tax form quarterly and must pay a 40% excise tax on cigars brought into Massachusetts.
In order to evade tobacco taxes, beginning around 2010, Iqbal and his business partner repeatedly purchased tens of thousands of dollars at a time worth of smokeless tobacco and cigars in Pennsylvania where no taxes are imposed for these tobacco products. They then arranged to have these tobacco products covertly transported to Massachusetts for resale, without filing the records required by Massachusetts state law and federal law, and without paying excise taxes.
At the direction of Iqbal and his business partner, their employees repeatedly engaged in large cash transactions in order to conceal and disguise the nature, location, source, ownership and control of the proceeds of their illegal tobacco business and to avoid transaction reporting requirements under federal and state law. Their employees also transported more than $50,000 in cash at a time from Massachusetts to Pennsylvania where the money was used to purchase additional untaxed smokeless tobacco and cigars.
One of Iqbal’s co-defendants, Kaleem Ahmad, is scheduled to be sentenced tomorrow.
United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and David W. Hall, Special Agent in Charge of the U.S. Department of State, Boston Field Office, made the announcement today. Valuable assistance was also provided by the Massachusetts Department of Revenue. Assistant U.S. Attorneys Stephen P. Heymann of Ortiz’s Economic Crimes Unit and Doreen Rachel, Chief of Ortiz’s Asset Forfeiture Unit, handled the case.