Nobody likes to pay taxes, but I-Team has found a man who allegedly made a fortune tax evasion man. What is more disturbing, that it does so by moving the products that cause cancer into the state?
Bokhari has made much of his fortune to move large amounts of tobacco in Pennsylvania, where there are no taxes in New England, where taxes are higher than 90 percent.
But I-Team learned Bokhari is now under federal investigation for allegedly cheating taxpayers out of tens of millions of dollars of unpaid taxes tobacco.
Jeff Cohen, the lawyer the U.S. Bureau of Alcohol, Tobacco and Firearms, has agreed to talk to the I-Team, but would not discuss the case Bokhari in particular.
“All I can say is what we do in the ATF, we focus on large organizations that are involved in interstate commerce tax-free tobacco products,” said Cohen.
And that is why in the spring federal agents ATF, FBI and Homeland Security raided dozens of places associated with Bokhari, including a warehouse in Scranton, Pennsylvania, and five distributors in Connecticut and Massachusetts.
Records in federal court in Boston, received I-Team, show the feds seized 267 pallets of smokeless tobacco, cigars and tobacco free - what authorities call “other tobacco products” or “OTP” - ready for sale in stores across New England.
And the federal government claims that no one pays taxes on tobacco products - not a wholesaler, not retailers.
“The shops are buying these things for half the price,” Cohen said, speaking in general about such cases. “They sell them cheaper than their competitors, and they take the rest of the money, and they are spending money.”
Bukhari, who was not charged with a crime, will not talk to I-Team, but his lawyer, Martin Weinberg did.
“Syed Bukhari is a person completely innocent of any wrong doing,” said Weinberg. “This is a far-fledged, unprecedented, and again I say, unprincipled theory that the supplier is responsible for the failure of their clients tax.”
Asked about the government’s assertion that the “customers” involved were in fact part of an operation to Bokhari, Weinberg said, “This is pure mythology.”
Federal investigators told the I-Team, that states are losing billions of dollars in schemes like these. But he not only lost tax revenue, they are concerned. There is also a real danger to health because cheap tobacco products are very attractive to young people.
“If it’s cheap, we know, children are more likely to use it,” said Dr. Lauren Smith, the acting commissioner of the Massachusetts Department of Public Health.
“The fact that there would be no possibility of these products to come to the state without the tax means that they will be more accessible,” she said.
Filings in the related federal civil action reveal that investigators have also considered criminal charges against Bokhari and his associates, including wire fraud and money laundering.
For five months of the tobacco operations Bokhari was effectively closed by federal raids, Massachusetts Department of Revenue, said tax collections in the state on smokeless tobacco, cigars and tobacco freely increased by more than $ 4 million.