A Bronx-based enterprise group, a North Carolina wholesale cigarette distributor and several convenience store owners have been accused of bringing millions of untaxed cigarettes into the five boroughs, costing the city and state $25 million in taxes, according to the city’s law department.
Moflehi Enterprise, a 21-member group, has been charged with money-laundering, enterprise corruption and tax law violations among other offenses, according to the law department.
The 39-page civil suit was filed Wednesday in the U.S. District Court for the Southern District of New York.
According to the allegations, North Carolina-based cigarette wholesaler H&H Distributors sold cigarettes to several state convenience stores knowing they would be illegally brought to New York. Starting in 2015, according to the law department, the stores hired transporters to traffic forged cigarette tax stamps and up to $500,000 per week in untaxed smokes to the Moflehi Enterprise. Moflehi Enterprise then distributed them to bodegas throughout New York.
“This lawsuit is another tool to stem criminal activity that also adversely affects the public’s health. These defendants allegedly cheated the City and State out of millions of dollars in revenue that should be used for the people of New York,” Bronx District Attorney Darcel D. Clark said in a statement. “They also undercut law-abiding businesses that serve our neighborhoods and cannot compete with stores illegally selling untaxed, cheap cigarettes.”
In New York, there is a $58.50 per carton cigarette excise tax. But in North Carolina, that price is only $4.50 per carton, according to the law department.