iNDICA NEWS BUREAU-
A corporate president and his two corporations, N. Ali Enterprises Inc. of Naperville, Illinois, and 21st Century Distribution Inc., of Las Vegas, Nevada, pleaded guilty on Thursday to 20 counts of mail and wire fraud in a California excise tax fraud scheme.
According to court documents, Rahman Lakhani of Naperville, Illinois, and the corporate defendants used warehouses in Illinois, Nevada, and California, to move over $25 million worth of non-cigarette tobacco (known as Other Tobacco Products or OTP, such as cigars and chewing tobacco) across the United States and into California.
The defendants are scheduled to be sentenced by U.S. District Judge Daniel J. Calabretta on May 16, 2024. Lakhani faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count. The corporate defendants each face a maximum potential penalty of five years of probation and a $500,000 fine for each count.
As the defendants moved the OTP from state to state, they submitted false excise tax returns designed to hide the size and value of the shipments, U.S. Attorney Phillip A. Talbert informed. The OTP was sold into California with the misrepresentation that tax had been paid. Lakhani and the corporate defendants submitted false tax returns to the California Board of Equalization (BOE) and the California Department of Tax and Fee Administration (CDTFA). Lakhani and the corporate defendants defrauded the State of California of over $5.9 million.
This fraud allowed Lakhani and the corporate defendants to earn additional profit and undercut competitors who lawfully paid the excise tax. A large percentage of the proceeds of the California OTP excise tax are used to fund California’s early childhood development program, First 5 California.
