Final Defendant Convicted After Five-Day Trial of Conspiracy to Distribute Over $6.6 Million in Contraband Cigarettes
BALTIMORE, MD—A federal jury today convicted Nikolay Zakharyan, age 24, of Owings Mills, Maryland, for conspiracy to receive, possess, sell and distribute over $6.6 million in contraband cigarettes, that is, cigarettes on which the applicable state taxes have not been paid. Nikolay’s father, Artur Zakharyan, age 54, of Reisterstown, pleaded guilty before trial to his participation in the conspiracy.
The conviction and guilty plea were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Special Agent in Charge Antoinette V. Henry of the U.S. Food & Drug Administration, Office of Criminal Investigations; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to their guilty pleas, Elmar Rakhamimov was the leader and organizer of the scheme, and he coordinated with Ilgar Rakhamimov (no relation) and Artur Zakharyan to collect the money to purchase the contraband cigarettes, and to arrange for the storage and transportation of the contraband cigarettes to Brooklyn, New York. Elmar Rakhamimov, Ilgar Rakhamimov, and Artur Zakharyan purchased contraband cigarettes on 18 occasions between December of 2011 and November of 2013 from an undercover FBI agent operating in the Baltimore County, Maryland area.
According to court documents and testimony at the five day trial, Artur Zakharyan recruited his son, Nikolay Zakharyan, to participate in the scheme. Nikolay Zakharyan assisted in the unloading, accounting, bagging, moving and loading of the master cases of contraband cigarettes. Nikolay Zakharyan traveled to the home of Elmar Rakhamimov to assist during no less than 10 deliveries of contraband cigarettes. Nikolay Zakharyan unloaded the cases of cigarettes from the truck into Elmar Rakhamimov’s garage and counted the number and types of cigarettes delivered to ensure that the delivery was complete. Nikolay Zakharyan also traveled to Elmar Rakhamimov’s home in the days following the delivery of the cigarettes to load them into the vehicle used to transport the contraband cigarettes to Brooklyn, New York.
Other members of the conspiracy included Zarakh Yelizarov, Salim Yusufov, Adam Azerman, Shamil Novakhov, and Ruslan Ykiew.
The first transaction occurred at Chesapeake Monuments, a business owned by Ilgar Rakhamimov, on December 11, 2011, when Elmar Rakhamimov and Ilgar Rakhamimov purchased 20 master cases of contraband cigarettes in exchange for $18,000 in cash. After the first transaction, the contraband cigarettes were delivered to and stored at the home of Elmar Rakhamimov in Owings Mills. Prior to each transaction, Elmar Rakhamimov, Ilgar Rakhamimov, and Artur Zakharyan discussed the transaction on the phone, and frequently met at Elmar Rakhamimov’s home to discuss the purchase and compile and count the money for the transaction.
The cigarettes were sold and distributed in quantities of 10,000 cigarettes or more, and bore no evidence of the payment of applicable state sales taxes. At the time of the indictment the cigarette tax in Maryland was $2.00 per package of cigarettes ($20 per carton of cigarettes) and the cigarette tax in New York was $4.35 per package of cigarettes ($43.50 per carton of cigarettes). The total tax evaded over the course of the conspiracy was more than $2.5 million.
Following many of the deliveries, the conspirators met at Elmar Rakhamimov’s residence to discuss moving the cigarettes to Brooklyn, New York where the cigarettes were sold at a profit to individuals in New York, who further distributed the contraband cigarettes. The cigarettes were often transported from Maryland to New York by Adam Azerman, who delivered them to Shamil Novakhov, a relative of Ilgar Rakhamimov. Ilgar Rakhamimov brought Novakhov into the conspiracy, and was the primary contact with Novakov throughout the conspiracy. Novakhov’s nephew, Ruslan Ykiew, also would travel from New York to Maryland to obtain contraband cigarettes and transport them to his uncle in New York. Ykiew initially stored the cigarettes in a restaurant he owned. At Novakhov’s request, in 2012 Ykiew rented a warehouse for the storage of the contraband cigarettes. Ilgar Rakhamimov and his co-conspirators paid $30 for each carton of contraband cigarettes, and sold them to buyers in New York for approximately $41 to $45 per carton.
Yelizarov and Elmar Rakhamimov laundered the proceeds of the contraband cigarette sales through an international money laundering operation that wired funds from banks located in Latvia, Cyprus, Estonia, and New York, to a bank in Maryland, disguising the money as legitimate business payments for medical equipment or supplies. From December 27, 2012 through September 5, 2013, Yelizarov and Rakhamimov wired a total of $649,500 through 12 transactions.
As part of his plea agreement, Artur Zakharyan is required to forfeit $50,000 believed to be proceeds of the offense, $11,947 and a 1 troy ounce gold bar seized from Zakharyan’s belongings on December 17, 2013, and four troy ounce gold bars and a gold coin seized from his home on December 11, 2013.
Artur and Nikolay Zakharyan each face a maximum sentence of five years in prison for conspiracy to traffic in contraband cigarettes. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for Artur Zakharyan for July 9, 2015, at 1:00 p.m. and for Nikolay Zakharyan on July 29, 2015 at 10:00 a.m.
Elmar Rakhamimov, a/k/a “Eric Rakhamimov,” age 42, of Owings Mills, Maryland, and his brother, Salim Yusufov, age 44, of Reisterstown, Maryland; Ilgar Rakhamimov, age 41, Zarakh Yelizarov, age 52, and Adam Azerman, age 60, all of Pikesville, Maryland; and Shamil Novakhov, age 59, and Ruslan Ykiew, age 40, both of Brooklyn, New York, previously pleaded guilty to their roles in the conspiracy and are awaiting sentencing.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, U.S. Food & Drug Administration, Office of Criminal Investigations and Office of Inspector General of the Department of Health and Human Services – Office of Investigations for their work in the investigation and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office for its assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and John W. Sippel, Jr., who are prosecuting the case.