Nine Retailers Charged with Tobacco Tax Evasion
SALEM, Ore. -- Nine convenience retailers and four tobacco distributors were indicted in connection with a tax evasion plot that allowed them to forgo at least $200,000 in tobacco taxes, Oregon Department of Justice officials told the Statesman Journal.
The retailers -- five of them Center Market convenience stores -- allegedly purchased and resold untaxed products with knowledge of the unpaid taxes.
"This is the first time that we believed we had information to charge the distributor and the retailer for knowingly receiving an untaxed product," assistant Attorney General Donna Maddux told the Journal.
Of the five Center Market stores in the state tied to the plan, Bahadur Singh operates three of the stores, and declined to comment to the paper. "We'll see what happens," was all he said. Singh's son, Soni Singh, was also charged in connection with the crime and operates another Center Market in the state.
A four-year investigation that searched 20 retailers in the Salem, Ore. area lead to the indictments, the report stated. The investigation was based on information officials received from two distributors -- Li'l Brown Smoke Shack and New Jersey-based House of Oxford. In August, Yakima, Wash.-based Li'l Brown Smoke Shack was the focus of an investigation on non-tax paid tobacco products.
The investigation lead to a tobacco distributor, J.K. wholesale, which was run by two brothers and their wives. J.K. Wholesale distributed to more than 40 retail outlets, many of them convenience stores, the report stated.
"It started out with one business entity and then we realized it was more than one person," Maddux said.
The wholesaler's operators, brothers Gurdip Singh Sangha, Kulwinder Singh Sangha and their wives, Jarnail Kaur and Kuldip Kaur, were allegedly underreporting taxes on tobacco products including chewing tobacco and loose tobacco. The four face felony racketeering charges, the report stated.
Until December 2003, the family distributed the products from their home in Estacada, Ore., then moved to Battleground, Wash., but continued to distribute the products to Oregon retailers, according to the report. Under Oregon law, tobacco product distributors must be licensed by the Oregon Department of Revenue and pay a 65 percent tax on the wholesale cost of untaxed paid purchases. Store retailers are required to purchase tax-paid tobacco products and proof of the sales for five years. If violated, the retailer could face felony charges. In many of the retaiers' cases, records of product sales were destroyed, Maddux said.
Not all of J.K. Wholesale's retailers knew of, or received products at discounted rates, said Maddux. Some stores received products at regular marked distribution price, while others received products for significantly less.
The investigation lead to charges for 13 individuals -- Gurdip Singh Sangha, distributor; Jarnail Kaur, distributor; Kulwinder Singh Sangha, distributor; Kuldip Kaur, distributor; Bahadur Singh, operator of Center Markets in Salem, Willamina and Dayton, Ore.; Soni Singh, operator of Center Market in Salem, Ore.; Satnam Singh, operator of City Center Market in Dundee, Ore.; Ranjit Singh and Jaswant Singh Sranna, operators of Oregon Mini Mart in Lebanon, Ore.; Sukhjit Singh and Rajkiran Toor, operators of Toors Texaco, Estacada, Ore.; Dalvinder Singh of Tobacco World in Lebanon, Ore., who has not been found by authorities as of press time.
The retailers -- five of them Center Market convenience stores -- allegedly purchased and resold untaxed products with knowledge of the unpaid taxes.
"This is the first time that we believed we had information to charge the distributor and the retailer for knowingly receiving an untaxed product," assistant Attorney General Donna Maddux told the Journal.
Of the five Center Market stores in the state tied to the plan, Bahadur Singh operates three of the stores, and declined to comment to the paper. "We'll see what happens," was all he said. Singh's son, Soni Singh, was also charged in connection with the crime and operates another Center Market in the state.
A four-year investigation that searched 20 retailers in the Salem, Ore. area lead to the indictments, the report stated. The investigation was based on information officials received from two distributors -- Li'l Brown Smoke Shack and New Jersey-based House of Oxford. In August, Yakima, Wash.-based Li'l Brown Smoke Shack was the focus of an investigation on non-tax paid tobacco products.
The investigation lead to a tobacco distributor, J.K. wholesale, which was run by two brothers and their wives. J.K. Wholesale distributed to more than 40 retail outlets, many of them convenience stores, the report stated.
"It started out with one business entity and then we realized it was more than one person," Maddux said.
The wholesaler's operators, brothers Gurdip Singh Sangha, Kulwinder Singh Sangha and their wives, Jarnail Kaur and Kuldip Kaur, were allegedly underreporting taxes on tobacco products including chewing tobacco and loose tobacco. The four face felony racketeering charges, the report stated.
Until December 2003, the family distributed the products from their home in Estacada, Ore., then moved to Battleground, Wash., but continued to distribute the products to Oregon retailers, according to the report. Under Oregon law, tobacco product distributors must be licensed by the Oregon Department of Revenue and pay a 65 percent tax on the wholesale cost of untaxed paid purchases. Store retailers are required to purchase tax-paid tobacco products and proof of the sales for five years. If violated, the retailer could face felony charges. In many of the retaiers' cases, records of product sales were destroyed, Maddux said.
Not all of J.K. Wholesale's retailers knew of, or received products at discounted rates, said Maddux. Some stores received products at regular marked distribution price, while others received products for significantly less.
The investigation lead to charges for 13 individuals -- Gurdip Singh Sangha, distributor; Jarnail Kaur, distributor; Kulwinder Singh Sangha, distributor; Kuldip Kaur, distributor; Bahadur Singh, operator of Center Markets in Salem, Willamina and Dayton, Ore.; Soni Singh, operator of Center Market in Salem, Ore.; Satnam Singh, operator of City Center Market in Dundee, Ore.; Ranjit Singh and Jaswant Singh Sranna, operators of Oregon Mini Mart in Lebanon, Ore.; Sukhjit Singh and Rajkiran Toor, operators of Toors Texaco, Estacada, Ore.; Dalvinder Singh of Tobacco World in Lebanon, Ore., who has not been found by authorities as of press time.