New York says breaks cigarette-smuggling ring linked to militants

Thu May 16, 2013 8:40pm EDT

1 of 7. New York Police Department Commissioner Ray Kelly speaks at a news conference announcing an organized crime task force take down of an unstamped cigarette trafficking ring in New York, May 16, 2013.

Credit: Reuters/Lucas Jackson

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(Reuters) - Fifteen men of Palestinian origin have been arrested on charges of running a multi-million-dollar cigarette smuggling ring in New York, and New York authorities who announced the arrests on Thursday said several of the suspects have ties to Hamas and other Islamist militant groups.

The men are accused of smuggling more than a million cartons of untaxed cigarettes from Virginia to be sold in grocery stores across New York, with $55 million in sales uncovered so far, Eric Schneiderman, the New York attorney general, and Ray Kelly, the New York City police commissioner, said at a press conference.

"We don't know where all of that money went, but what we do know is deeply troubling," Schneiderman said. "We know that some members of this group have ties to very dangerous people, we know they were arrested with weapons, we know that they made tens of millions of dollars but so far we have found only a fraction of that."

Investigators are still tracking where much of the money ended up, but they noted similar rings in the past have funneled money to Hamas, the Islamist government in Gaza, and Hezbollah, the militant Shi'ite group based in Lebanon, both of which are considered to be terrorist organizations by the United States.

All 15 men remained in custody on Thursday and could not be reached for comment. It was not immediately clear if they had retained lawyers.

A 16th man accused of taking part in the ring, Ribhi Awadeh, 39, from Guttenberg, New Jersey, remained at large after flying to Jordan several weeks ago, Schneiderman said.

In a 224-count indictment, the men are charged with enterprise corruption, money laundering and other tax crimes, for which each defendant faces up to 25 years in prison if convicted. In addition to costing New York State and New York City an estimated $80 million in lost sales tax revenue, the ring generated at least $10 million in profit, Schneiderman and Kelly said.

None of the men lived extravagantly, Schneiderman said, adding that this supported the idea the money was being funneled elsewhere.

"This is not the lifestyles of the rich and famous," Schneiderman said. "We are very concerned about where the money went."

Kelly said that Youssef Odeh, 52, of Staten Island, who is accused of being a distributor for the ring, received an investment for an illegal baby formula distribution business in the 1990s from Omar Abdel Rahman, often dubbed the "blind sheik," who is imprisoned for helping plot the 1993 World Trade Center bombing.

Muaffaq Askar, 46, of Brooklyn, who is accused of being one of the ring's resellers, was a confidant of Rashid Baz, Kelly said. Baz, a Lebanese immigrant, is serving a 141-year prison sentence after being convicted in the 1994 shooting of Ari Halberstam, a 16-year-old yeshiva student in Brooklyn, which Baz said was in retaliation for the killing of Muslim worshippers in the West Bank by a Jewish settler from Brooklyn.

Mohannad Seif, 39, of Brooklyn, another accused reseller, had been under police surveillance in part because he had lived in the same three-story Brooklyn building as a former secretary to Moussa Abu Marzouk, a deputy leader of Hamas.

Authorities said the ring was headed by two brothers, Basel Ramadan, 42, and Samir Ramadan, 40, both of Ocean City, Maryland, who ran a couple of local Subway restaurant franchises. Investigators said they found $1.4 million stashed in Basel Ramadan's home, some of it stuffed in black plastic trash bags, and three handguns following his arrest on Thursday.

The ring bought cigarettes from a wholesaler in Virginia and kept them in a storage facility in Delaware, Schneiderman said.

A co-conspirator, Adel Abuzahrieh, 42, of Brooklyn, was accused of driving from New York to Delaware several times a week to exchange cash for cigarettes, and then return with the illicit goods for resale.

Two of the accused men are in the United States illegally, according to Immigrations and Customs Enforcement. Others, including the Ramadan brothers, are naturalized citizens, while the rest are legal permanent residents.

(Reporting by Mark Hosenball; Additional reporting by Jonathan Allen; Editing by Eddie Evans, Barbara Goldberg, David Storey and Leslie Adler)

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Comments (4)
GradyPhilpott wrote:
Bloomberg will call for a nationwide cigarette ban to prevent their being smuggled into New York, thereby avoiding taxation, funding terrorists, and compromising public health.

May 16, 2013 11:47pm EDT  --  Report as abuse
tdlane wrote:
Not so surprising. Impose high taxes on any product and you will create a black market.

May 16, 2013 11:57pm EDT  --  Report as abuse
Darthen wrote:
Lovely that violent crime is so scarce in New York that police have the time and resources to crack down on victimless “crime.”

May 17, 2013 4:40am EDT  --  Report as abuse
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