Attorney General Bonta Announces Seven-Year Sentence in $ 51 Million Fraudulent Tobacco Distribution Program | State of California – Department of Justice
OAKLAND – California Attorney General Rob Bonta today announced Ali Tavaf’s conviction for implementing a six-year fraudulent scheme to evade payment of more than $ 14 million in excise tax on more of $ 51 million in imported tobacco. In November 2019, Tavaf pleaded guilty to several counts of producing a false income tax return and a special allegation of increasing white-collar crime by over $ 500,000. He was sentenced today to seven years in state prison. Tavaf was also ordered to pay $ 13,508,397 in restitution in addition to the million dollars he paid to the California Department of Tax and Fee Administration (CDTFA). The $ 14,508,397 represents the total tax owed to the department.
“Tax evasion is a serious crime that costs Californian taxpayers dearly” said Attorney General Rob Bonta. “I hope today’s conviction is a reminder that when you break the law, you will be held accountable. I am grateful for the dedication of the California Department of Tax and Fee Administration and other agencies of the TRUE Task Force in representing the interests of Californians.
“Tax evasion hurts all Californians. We are losing taxpayer dollars that support vital programs in our communities, and that puts hard-working, rule-playing business owners at a disadvantage. said Nick Maduros, director of tax and fee administration for the California department.. “It is important that our services work together to eradicate tax evasion.
Distributors who import tobacco into California and distribute it in the state are required to report the distribution and pay the required excise tax.
Between April 2012 and September 2017, Tavaf purchased and sold approximately 250 tobacco tractor-trailers from California retailers from distributors in Florida, Pennsylvania and Virginia. During this time, he filed false income tax returns with the CDTFA in order to evade excise tax payments totaling $ 14,508,397 on $ 51,358,470 of tobacco. On July 25, 2019, Tavaf was charged with 54 counts of filing a fraudulent report and special allegation of increasing white collar crime by over $ 500,000.
Today’s sentence is the result of an investigation by the California Department of Justice and the CDTFA’s Bureau of Investigations. Both agencies are part of the multi-agency Tax Recovery in the Underground Economy (TRUE) working group, which also includes the California Employment Development Department and the Franchise Tax Board. The TRUE working group was created to ensure collaboration between several agencies and to combat salary theft, tax evasion and other crimes in the underground economy. The working group is made up of lawyers, investigators and special agents from member agencies.
A copy of the information is available here.