Florida man defrauded California of more than $10 million in tobacco smuggling scheme

A Miami man has pleaded guilty in federal court to charges that he defrauded the state of California of more than $10 million in tobacco tax revenue.

Akrum Alrahib, 43, entered a guilty plea in U.S. District Court for the Eastern District of California to a charge of conspiring to commit mail fraud in non-cigarette tobacco schemes.

Between April 2016 and December 2017, Alrahib provided multiple California businesses with untaxed non-cigarette tobacco, such as cigars, chewing tobacco and loose leaf tobacco, according to the U.S. Attorney’s Office for the Eastern District of California.

“During the relevant time period, California imposed an average excise tax of about 28.13% of the wholesale cost of the (of the products) between April 2016 and June 2016; 27.30% between July 2016 and June 2017; and 65.08% between July 2017 and December 2017,” according to the U.S. Attorney’s Office.

That adds up to more than $10 million in tax revenue which never made it to state coffers.

“Tax evasion is not a victimless crime. California communities lose critical tax dollars that pay for vital programs, and it isn’t fair for those hard-working business owners who play by the rules,” said California Department of Tax and Fee Administration Director Nick Maduros in a statement. “It’s important for our department and the U.S. Attorney’s Office to work together to stop tax evasion.”

A U.S. District Court judge is set to sentence Alrahib on Dec. 13. Alrahib faces a maximum of five years in prison and a $250,000 fine, though the actual sentence will be at the discretion of the judge and based on sentencing statutes and guidelines.