A former Los Angeles tobacco entrepreneur, who conspired to evade millions of dollars in California state and federal taxes, has been sentenced to five years in federal prison and ordered to pay $7 million in restitution and asset forfeiture, according to the U.S. Attorney’s Office of the Southern District of Florida. A co-conspirator was sentenced to four years and required to pay $10 million.
The tobacco executive, president and owner of Trendsettah USA Inc., and his Miami co-conspirator, a tobacco importer, evaded Federal Tobacco Excise Taxes by underreporting the $21 million Trendsettah paid the importer for Dominican Republic tobacco products. Additionally, the owner of Trendsettah admitted receiving $700,000 in kickbacks from the importer.
Also Guilty in California
In a separate case, the U.S. Attorney’s Office for the Eastern District of California reported the Trendsettah executive pled guilty to $10 million of tax fraud by failing to pay state excise tax on non-cigarette OTP (Other Tobacco Products). Sentencing has not been announced in that case pending “the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables,” the USAO press release stated.
The cases were investigated by the federal Alcohol and Tobacco Tax and Trade Bureau (TTB), Internal Revenue Service, and Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), in coordination with the California Department of Tax and Fee Administration.
“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.
A Hard Choice
Sometimes, your best option is to plead guilty and let your lawyer negotiate a shorter sentence, reduced fines, or dropped charges. Losing at trial can result in much harsher penalties. It's a tough decision, and one you should not make without the advice of experienced legal counsel. For a free consultation, call the Sigal Law Group at 818-325-0570.
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