Sentencing Complete for Leaders of Interstate Contraband Cigarette Trafficking Conspiracy
PROVIDENCE, RI—Wissam Khalil, 41, of Central Falls, R.I., and his brother, Bassam Nazir Khalil 49, of Pawtucket, R.I., were sentenced in U.S. District Court in Providence today for their roles as leaders of a complex interstate conspiracy that transported more than 6 million contraband cigarettes from Virginia to Rhode Island. The sale of the contraband cigarettes in Rhode Island resulted in the loss to the State of nearly $1.1 million dollars in tax stamp revenue.
U.S. District Court Chief Judge William E. Smith sentenced Wissam Khalil to 42 months in federal prison to be followed by three years’ supervised release; Bassam Nazir was sentenced to 33 months in federal prison to be followed by three years’ supervised release.
The sentences are announced by Peter F. Neronha, United States Attorney for the District of Rhode Island; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; Vincent B. Lisi, Special Agent in Charge of the Boston field office of the FBI; William P. Offord, Special Agent in Charge of the Boston field office of IRS Criminal Investigation; Bruce M. Foucart, Special Agent in Charge of Homeland Security Investigations for New England; Scott E. Antolik, Special Agent in Charge of the Boston field office of the Social Security Administration, Office of the Inspector General/Office of Investigations; and William G. Squires, Special Agent in Charge of the northeast region of the U.S. Department of Agriculture Office of Inspector General.
A federal court jury trial in July 2014 was halted when Wissam Khalil pleaded guilty to one count each of transporting, possessing or selling in excess of 10,000 contraband cigarettes; structuring; and conspiracy to defraud the Supplemental Nutrition Assistance Program. Bassam Khalil pleaded guilty to one count of transporting, possessing or selling in excess of 10,000 contraband cigarettes and one count of conspiracy to commit social security fraud.
A third brother, Najd C. Khalil, 26, of Pawtucket, surrendered to the court on Monday, having been removed from an outbound Boston flight to Paris Saturday night and detained during an alleged attempt to flee the country prior to self-surrendering to begin serving a 24 month federal prison sentence imposed for his role in the conspiracy. Najd Khalil pleaded guilty in September 2014 to one count each of conspiracy to traffic contraband cigarettes, structuring and food stamp fraud.
According to information presented to the court, between July 2011 and May 2013, more than 30-thousand cartons (6 million) of cigarettes valued at more than $1.2 million dollars were purchased in Virginia and shipped to Rhode Island via truck. The cigarettes were distributed and sold at various locations in Rhode Island at or near full-retail price. No state tax stamp was affixed to the packages of cigarettes and no tax payments were made to the State of Rhode Island, resulting in a loss of nearly $1.1 million dollars of tax revenue.
Four other individuals charged as a result of this investigation pleaded guilty and were sentenced previously to various terms of probation.
A federal arrest warrant has been issued for an eighth defendant, Nazir Khalil, 76, of Central Falls, R.I., father of Wissam, Bassam and Najd Khalil. It is believed that Nazir Khalil has remained outside of the United States since the arrest warrant was issued in September 2013.
Additionally, the government has moved to forfeit items seized from the defendants as a result of the investigation, including a Mercedes Benz SUV, Sierra pick-up truck, Chevrolet Tahoe, Toyota Camry and $121,956.08 in cash.
The case was prosecuted by Assistant U.S. Attorneys William F. Ferland and Ly T. Chin.
The matter was investigated by the Rhode Island State Police, Federal Bureau of Investigation, Internal Revenue Service Criminal Investigations, United States Social Security Administration Office of Inspector General—Office of Investigations, Homeland Security Investigations and the U.S. Department of Agriculture Office of Inspector General.
United States Attorney Peter F. Neronha also acknowledges and thanks the Virginia State Police, the Virginia Department of Attorney General, the Virginia Division of Taxation, the Northern Virginia Cigarette Tax Board, the Rhode Island Division of Taxation—Excise Tax Compliance Unit, the Rhode Island Department of Attorney General, and the Cranston and Providence Police Departments for their assistance in this investigation.