Authorities bust $12M cigarette smuggling operation based in Fayetteville
More than two dozen people were arrested last week in connection with a $12 million cigarette smuggling operation based in Fayetteville, authorities said Monday.
U.S. Attorney Robert Higdon said Justin Brent Freeman and his wholesale business, FreeCo Inc., at 231 Williams St., served as a hub for the illegal operation. People would pay cash for large quantities of cigarettes at FreeCo and other retailers in North Carolina, including Sam's Club stores in Raleigh, Fayetteville and Goldsboro, and would then pack the cigarettes into rental cars for shipment to Virginia, Higdon said.
In Richmond or Alexandria, Va., the cigarettes would be shifted to other cars and driven to Syracuse, N.Y., Higdon said. There, the contraband would again be moved to other vehicles to be dispersed across the state to be sold for cash, he said.
North Carolina collects $4.50 in tax on each carton of cigarettes, while New York collects $43.50 per carton, and cigarettes sold in New York City cost another $14 per carton on top of the state tax, Higdon said. So, the smugglers were making up to $54 per carton by selling the cigarettes in New York while avoiding the state and local taxes there, he said.
Federal authorities said they were alerted to the scheme last year when they noticed an unusually large amount of both cigarettes being sold at wholesale in the Fayetteville area and of vehicles stopped along Interstate 95 with cash in bulk.
"When you see sales that can't be explained in through the normal course of business, you start to take a look at those things," Higdon said.
A federal grand jury last week indicted Freeman, FreeCo and the following defendants with criminal conspiracy and money laundering: Malek Hamoud Alsaidi, Ibrahim Ahmed Alsaidi, Sadek Dahan Shahbain, Ayed Yahya Ali Alshami, Alshami Yahya Ali Alshami, Mohamed Hafed Abdou, Mohamed E. Ould El Bechir, Akram Ali Amer, Mohamed Yeslem Ould Izid Bir, Mohammed Saaid Darweesh, El Hassen Hamadi, Musheer Mohammed Hazam Al-Naqeb, Ali Mohammed Mashli Al Qadhi, Mohamed Mounir, Aied Awad Shibli, Shibli Abu Issa Shibli, Manar Mohammad Talal-Mustafa, Mohammed N.M. Khalayfa, Saleh Mohammad Abdeljawad, Kaid M.K. Addailam, Amr Mousa Alhalemi, Ahmad Khalayfa, Rawhi Abdel Jabbar Khams Awad, Ali Aied Shibli, Amchad Rawhi Khamis Awad, Wachdi Awad, Abdallahi Mohamed Elhafedh, Ahmed Elhoussein, Dedde Cheikh and Arafat A.I. Abuhammoud.
Mohamed E. Ould El Bechir, Mohamed Hafed Abdou, Shibli Abu Issa Shibli, Mohammed Saaid Darweesh, Kaid M.K. Addailam, Amr Mousa Alhalemi and El Hassen Hamadi also were charged with smuggling contraband cigarettes.
Matt Blashfield, who operates a printing company next door to FreeCo, said he was stunned when he learned about the smuggling charges.
"We passed them on a daily basis, waved to them in the morning," Blashfield said. '[It's] just unbelievable that something like this could be going on right next door."
The U.S. Marshals Service and local authorities staged raids in five states last week, arresting 25 of the 31 defendants – a 26th was taken into custody Monday morning – and seizing more than 4,700 cartons of cigarettes, $840,000 in cash, 11 vehicles and five firearms, authorities said.
The grand jury indictment also includes a forfeiture notice to give federal authorities authorization to pursue the seizure of up to $12 million in cash and property believed to be the proceeds of the operation, Higdon said.
"This is not the conclusion of our investigation," he said. "This is simply a very strong first step."
