California Business Owner Sentenced For Excise Tax Fraud
The owner of a tobacco distributing company in San Diego, California was recently sentenced to four years in federal prison for excise tax fraud. Salam Kalasho, 43 of El Cajon, had pleaded guilty to taking part in a scheme to defraud the State of California of more than $8.5 million in state tobacco excise taxes. In addition to his sentence, he was ordered to pay $8.5 million in restitution to the state.
“This sentence is a result of the diligent work of ATF and other members of our task force and prosecution team," stated Joseph M. Riehl, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), San Francisco Field Division. “Investigations into tobacco traffickers are arduous and require a long-term commitment, but the investment of our resources has prevented the loss of millions of dollars for the state of California."
Court documents indicated that, in an effort to avoid paying excise taxes, Kalasho reported 95-100 percent of his non cigarette sales or “other tobacco products" (OTP) as being exported out-of-state. This relieved him of having to pay excise taxes to California. The majority of his OTP was in fact sold in the state of California, most within driving distance of his business. In operating his fraud, he used multiple businesses in Arizona and California, multiple bank accounts in California under different account names, and multiple sets of financial records.
Licensed tobacco products distributors in California are required to report their monthly OTP distributions and pay the excise tax to the state of California. In an effort to contravene this requirement, Kalasho would submit false and fraudulent distributor returns by mail to the California State Board of Equalization (BOE), under-reporting the actual distributions and excise tax due.
“The work of the task force exposed systematic and widespread tax evasion in the distribution of tobacco products in California," said U.S. Attorney Benjamin Wagner. “Participants in that industry who might be tempted to short change the State of California should take note of the sentence announced today, and be warned that our investigations are not over."
If you are in need of criminal defense lawyer in California, please contact the Fresno based law firm of Hammerschmidt Broughton Law Corporation. Our attorneys can be reached at (559) 772-4614. We are also on the Web at www.hbcriminaldefense.com.