By Joe Pinchot
Herald Staff Writer
Federal officials have expanded their prosecution of a Sharon wholesale tobacco distribution firm by obtaining a new indictment with additional charges and adding the company’s owner as a defendant.
USA Trading Corp., 217 W. Budd St., and its former manager, Tareq Alsadi, 39, of Youngstown, were indicted in August with 28 counts of filing false reports of cash transactions.
A superseding indictment handed down by a grand jury Tuesday adds four counts of mail fraud and names company owner Raid Zaghari, 41, of Brooklyn.
According to the indictment, several related companies were involved in illegal activity, and the participants cut deals with nonassociated firms.
Zaghari was the “de facto owner” of USA Trading Corp. I and USA Trading Corp. V, both based at 217 W. Budd, the indictment said.
He also owned Jerusalem Enterprises Inc., Brooklyn, and PA Cash and Carry Corp., Levittown, and all four firms were in the business of selling and distributing what is known as “other tobacco products,” or tobacco products other than cigarettes, such as cigars, chewing tobacco and leaf tobacco, the indictment said.
Authorities allege USA Trading V and Jerusalem defrauded the state of New York out of taxes on tobacco products by concealing information and submitting false information from November 2006 to December 2009.
USA Trading V would buy tobacco and Jerusalem would purchase tobacco from USA Trading V for sale and distribution in New York, the indictment said. New York tax forms submitted by Jerusalem understated the amount of tobacco products Jerusalem had bought from USA Trading V, and how much Jerusalem possessed, authorities said.
The indictment alleges the defendants working through USA Trading I and V and PA Cash and someone named as YAZ ran a similar operation to defraud North Carolina of taxes on tobacco products from December 2007 through February 2011.
Alsadi worked out a deal with YAZ and Mr. Joe Wholesale in which USA Trading I and V and PA Cash would ship tobacco to North Carolina without disclosing the shipments to North Carolina tax authorities, and YAZ and Mr. Joe Wholesale would buy the tobacco for sale in the state without disclosing what it had bought, the indictment said.
The indictment also reiterates the allegations in the original indictment that USA Trading I and Alsadi falsified IRS forms concerning cash payments in excess of $10,000 from a single buyer.
Such forms are required to combat money laundering, the IRS said, but USA Trading omitted information from the forms 28 times between July 5 and Sept. 30, all 2011.
USA Trading was raided by agents of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives on Feb. 9, 2011, and the feds filed a civil suit against USA Trading the next month seeking the forfeiture of various tobacco products seized during the raid.
The suit said USA Trading skirted New York and Michigan excise taxes between January 2008 and the day of the raid.
The federal government auctioned the tobacco for $1,356,000 and is seeking forfeiture of that money, along with about $2.3 million in other funds controlled by the defendants.
Alsadi and USA Trading will be arraigned Thursday, while Zaghari has an April 3 court date.
In convicted, Zaghari could be sentenced to up to 20 years in prison on each of the four mail fraud charges, while Alsadi faces those same penalties plus up to 5 years for each of the 28 filing false reports charges, said the U.S. Attorney’s Office, Pittsburgh.
USA Trading I and V could be fined, forced to divest assets or ordered to forfeit assets.