Los Angeles Tobacco Distributor Sentenced in $3 Million Tax Evasion Scheme
Attorney General Bonta has announced a legal victory in the case of Sadiq Mohammed, a Los Angeles tobacco distributor convicted of running a $3 million tax evasion scheme against the State of California. The California Department of Justice (DOJ) successfully secured a 32-month prison sentence for Mohammed, who had pled guilty to these charges.
The Charges: Tax Evasion Scheme
Sadiq Mohammed faced multiple charges related to his elaborate tax evasion scheme:
Mohammed was charged with tax fraud under Penal Code Section 186.11. This charge stemmed from his underreporting of sales from his tobacco distribution business, L.A. Trading and Distribution, Inc., located in the Los Angeles area. Between 2017 and 2018, Mohammed knowingly filed tax returns that misrepresented the actual sales figures, concealing his taxable income.
Mohammed also faced charges under Penal Code Section 72 for making false statements on his tax returns. By falsely claiming that the tobacco products he imported from Florida and Illinois were interstate sales, he attempted to unlawfully evade California’s excise taxes, which are mandatory for out-of-state products. This charge reflects the deceptive nature of his financial activities.
The tax evasion charge, under Penal Code Section 19705, was a direct consequence of Mohammed’s actions. He intentionally evaded paying the appropriate excise taxes to the State of California, undermining the state’s revenue and financial resources.
The charges against Mohammed are serious and reflect a deliberate attempt to defraud the state through a sophisticated tax evasion scheme. By underreporting sales, making false statements, and unlawfully evading taxes, Mohammed not only committed financial crimes but also jeopardized essential state services funded by tax revenue.
Investigation and Prosecution
The DOJ’s Tax Recovery in the Underground Economy Task Force (TRUE) conducted the investigation into Mohammed’s activities. TRUE’s primary purpose is to combat underground economic crimes in California, specifically targeting tax evasion and wage theft. TRUE agencies collaborate across multiple agencies, working collectively to uncover and prosecute individuals engaged in these illicit activities.
Sentencing and Restitution
Sadiq Mohammed pleaded guilty to tobacco excise tax evasion on September 23, 2023. After authorities arrested him in 2022, he received a sentencing of 32 months in state prison on December 20, 2023. Additionally, the court ordered Mohammed to pay more than $3.04 million in restitution, reflecting the amount he unlawfully evaded in taxes.
California DOJ’s prosecution of Sadiq Mohammed shows commitment to holding financial crime perpetrators accountable, deterring further tax evasion.
