- Associated Press - Wednesday, July 8, 2015

RICHMOND, Va. (AP) - A Henrico County man charged in a multimillion-dollar cigarette trafficking scheme avoided a potentially long prison term and deportation by pleading guilty Wednesday to a single misdemeanor charge.

U.S. District Judge John A. Gibney told Maher Mustafa that his attorneys obtained “a terrific result” in plea negotiations that will allow the native of Jordan to remain in the United States. But he also noted that Mustafa will have to answer prosecutors’ questions if they pursue charges against people who bought cigarettes from him for resale on the black market in high-tax states in the Northeast.

Mustafa, 31, pleaded guilty to failing to report transactions greater than $10,000 as required by federal law. He also pleaded guilty to a similar felony charge against his company, the Cigarette Outlet Inc.

Mustafa faces up to a year in jail and the company up to a $1 million fine. Sentencing was set for Oct. 5.

According to the government, Mustafa sold millions of dollars in cigarettes to shell businesses that illegally smuggled them out of state. Mustafa admitted failing to reporting hundreds of transactions totaling more than $23 million.

Federal law requires businesses to file a form reporting large transactions to combat money laundering.

According to an affidavit filed by an Internal Revenue Service investigator, buyers of Mustafa’s cigarettes stored them in a Henrico County apartment and two rented garages before transporting them out of state. Agents seized evidence, including invoices for purchases of thousands of cartons of cigarettes, parking tickets from New York and a speeding ticket from New Jersey, from the apartment after the occupants were evicted for failing to pay rent. Evidence also was seized from the garages.

Mustafa also turned over financial records showing dozens of additional transactions of more than $10,000, none of which were reported.

Virginia, which has the nation’s second-lowest tobacco tax, is a major source of bootlegged cigarettes in high-tax states. Experts have told Virginia officials that a single van load can net a profit of $170,000.

Copyright © 2018 The Washington Times, LLC.

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