HAMBURG — Tammy Dickinson, United States attorney for the Western District of Missouri, announced that 18 individuals have been indicted by a federal grand jury in a more than $17 million, multi-state conspiracy to transport hundreds of thousands of cartons of contraband cigarettes from the Kansas City, Mo., area to New York state, where they were sold primarily on Indian reservations.
“When unscrupulous companies traffic in contraband cigarettes, they are stealing from the public through millions of dollars in lost tax revenue,” Dickinson said. “They also create an illegal and unfair advantage over legitimate businesses that follow the law. When they don’t pay the excise tax on their cigarettes, they are able to unfairly undercut the prices charged by off-reservation retailers.”
Among the 18 defendants were New York residents William Parry, 52, of Irving; Tara Sundown, 48, of Basom and Philip Christ, 54 and Salvatore Tornabene, 44, both of Hamburg. All were charged in a 44-count indictment returned, under seal, by a federal grand jury in Kansas City, Mo. on Aug. 12.
The federal indictment said that each of the defendants participated in a conspiracy to commit wire fraud and traffic in contraband cigarettes from July 2010 – Jan. 26, 2012.
According to the indictment, Craig Sheffler and Gholamreza Tadaiyon of Weston, Fla., purchased $17,345,610 worth of contraband cigarettes from undercover ATF agents, during an undercover operation. Approximately 620,600 cartons of cigarettes – containing 10 packs per carton – were transported to New York, without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in New York. The total state excise tax lost to the state of New York was approximately $8,148,420.
Parry owns and operates Wolf’s Run, a business that operates a gas station, convenience store and trucking transport business.
Tornabene was a driver for Parry.
Sundown operated Jan’s Smoke Shop, a reservation business with a gas station and convenience store. None of these individuals or their businesses were licensed to bring cigarettes into New York.
Sheffler, the owner of Cheap Tobacco Wholesale, made regular purchases of contraband cigarettes from undercover ATF agents in Kansas City. He sold many of the cigarettes to Tadaiyon, whose drivers picked them up directly from the ATF warehouse in Kansas City, Mo. The rest of the cigarettes were shipped to New York, either from the undercover ATF warehouse or from the Cheap Tobacco Wholesale warehouse in Independence.
The indictment cited a series of purchases of cigarettes during the conspiracy, each transaction involving thousands of cartons and hundreds of thousands of dollars.
According to the indictment, Parry ordered cigarettes directly, while Sundown placed orders for unstamped cigarettes through Christ and Barber. Barber (through Seneca Cayuga Tobacco Company) then placed orders for those unstamped cigarettes from Tadaiyon and Brand Name Connoisseurs. Tadaiyon forwarded the order to an individual who emailed the order for the unstamped cigarettes.
According to the indictment, through the end of Sept. 22, 2011, after the orders had been placed, cigarettes were transported from Kansas City to Seneca Cayuga Tobacco Company in Oklahoma and then to Wolf’s Run, Jan’s Smoke Shop, AJ’s and the Totem Pole Smoke Shop in New York.
According to the U.S. attorney, the cigarettes were sold at Wolf’s Run store, as well as to other smoke shops on the reservations in New York. Dickinson said that Sundown sold the unstamped, untaxed cigarettes at Jan’s Smoke shop.
Dickinson said that the charges contained in this indictment are accusations and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
Information provided by the United States Department of Justice and the U.S. Attorney’s Office: Western District of Missouri.