Comptroller’s Agents Arrest Gaithersburg Man; Cite Businesses in Four Counties in OTP Bust

-Three-Month Investigation Resulted in Confiscation of Nearly 49,000 Packages

Annapolis, Md. (April 8, 2015) – Comptroller Peter Franchot today announced that members of his Field Enforcement Division arrested a Gaithersburg man following a three-month investigation into the illegal importation, transportation and retail sales of untaxed Other Tobacco Products (OTP). The OTP products — cigars and related products, snuff and chew totaling nearly 49,000 packages — were imported into Maryland and sold in retail establishments in Baltimore City, Baltimore County, Prince George’s County, Anne Arundel County and Harford County.

“This arrest and criminal citation reflects the ongoing, diligent efforts of my field enforcement agents to crack down on businesses who engage in illegal activities,” Comptroller Franchot said. “We will continue to use our legal authority and the full resources of the Comptroller’s Office to go after those who put consumers at risk and who unfairly undercut honest, law-abiding businesses through illicit sales.”

The investigation revealed that Iqbal Mohammed Hussain Thada, 44, of Gaithersburg obtained tobacco products from wholesalers in Virginia and Pennsylvania, transporting the OTP into Maryland and distributing it to retail stores as a wholesaler. The retailers then sold the untaxed tobacco to Maryland consumers. OTP from Virginia or Pennsylvania, which can be bought without an excise tax or at a reduced rate, can be unlawfully imported and distributed by unlicensed wholesalers and sold by retailers to increase profit margins through illegal sales, or in many cases, to sell directly to minors.

The investigation concluded on March 24, 2015, when Mr. Thada was observed delivering untaxed OTP in a 2013 Nissan cargo van to a Landover Exxon gas station and store in Hyattsville. Agents found a large quantity of untaxed OTP in the van as well as in the store. The van was seized as a result.

Field Enforcement Division agents and inspectors then fanned out throughout the four counties and Baltimore City and searched a residence at 15014 Jerimiah Lane in Bowie, which was used as a warehouse. Seized from the van and the warehouse were 44,923 packages of untaxed OTP with a retail value of more than $40,000.

Mr. Thada faces a felony charge of willful transportation of OTP without paying the tobacco tax. He faces two additional misdemeanor charges of possession to sell untaxed OTP and failure to have appropriate OTP licenses when acting as a licensed Maryland Other Tobacco Product Wholesaler, Tobacconist or storage warehouse. A court date has been sent for May 7 in Prince George’s County.

During inspections of 25 retail stores, it was discovered that four additional stores sold untaxed tobacco products. The inspection resulted in untaxed tobacco products seized at the following locations:

Landover Exxon, 6579 Annapolis Rd., Hyattsville, 415 packages of OTP with a retail value of $518.75. Criminal citation issued to Belvir Singh, 42, 8545 Black Star Circle, Columbia, for possession, sale or offer to sell untaxed OTP.

Apex Mini Mart, 5301 East Drive, Arbutus, 1,685 packages of OTP with a retail value of $1,685, andRosedale Crown, 1771, Chesaco Ave., Rosedale, 361 packages of OTP with a retail value of $361. Two criminal citations issued to Moazzam Aftab, 44, 9088 Town and Country Boulevard, Apt. 6E, Ellicott City, Md.; for possession, sale or offer to sell untaxed OTP.

York Road Crown, 5101 York Rd., Baltimore, 1,391 packages of OTP with a retail value of $1,391. Criminal citation issued to Abdalatti M. Eighannan, 45, 9801 Kraft Hill Rd., Perry Hill, for possession, sale, or offer to sell untaxed OTP.

Riverdale Tiger Mart, 6117 Baltimore Ave., Riverdale, 94 packages of OTP with a retail value of $94. Criminal summons issued for Ali Asad, 15014 Jeremiah Lane, Bowie, for possession, sale or offer to sell untaxed OTP.

Maryland imposes a 70 percent excise tax on all tobacco products imported into the state other than premium cigars, pipe tobacco and cigarettes. A licensed wholesaler of OTP is the only business entity that can lawfully introduce the untaxed OTP onto the market. The licensed wholesaler is required to pay the 70 percent excise tax – paid to the Comptroller’s Office – upon acquiring the untaxed OTP from a manufacturer or out-of-state wholesaler.

The Comptroller has been a longtime vocal proponent for aggressive enforcement of tobacco tax laws and tougher penalties to assist in the battle against illegal cigarette and OTP smuggling in Maryland.