Billerica Angle in Alleged NH Tax Fraud Case
CONCORD, N.H. -- A Nashua man pleaded guilty to mail fraud in federal court Jan. 2 in connection with a scheme to evade tobacco excise taxes in New Hampshire and two Massachusetts’ communities, including Billerica.
Aldean Khater paid partial restitution of $400,000 to the New Hampshire Department of Revenue Administration as part of his plea agreement, the DRA announced in a statement via Montagne Communications Thursday. He is scheduled to be sentenced April 18.
According to the press release, Khater was formally licensed as a wholesaler in both states. He operated Khaternet, LLC and True Tobacco in Nashua, and was manager of Mass Cash and Carry in North Billerica and Woburn.
“Khater made false claims about his purchasing and selling practices on his website, on invoices to customers, on licensing documents filed with the NH Department of Revenue, and he lied on a number of his tax returns,” NHDRA Commissioner Lindsey Stepp said in the statement. “Schemes of any scale to defraud and deprive the state of New Hampshire and its law abiding citizens of tax revenue will not be tolerated.”
Between 2012 and 2017, Khater purchased and shipped products -- worth tens of thousands of dollars at time -- under the OTP category (other tobacco products, besides cigarettes) from distributors in other states to sell wholesale in Massachusetts and New Hampshire without paying all of the applicable taxes owed to the states the products were purchased from.
To conceal his crimes, the DRA said, Khater “vastly underreported” his OTP wholesale sales in both states. Over the five year period, he paid less than $130,000 in tobacco taxes, a tiny fraction of the amount owed.
Of 2017, Khaternet was advertised on its website as the “leading wholesale tobacco company in the USA,” and Khater was depositing large sums into multiple bank accounts in Massachusetts and New Hampshire. One account in particular had $4 million added during a 15-month period.
The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, the NH DRA and the Massachusetts Department of Revenue, and is being prosecuted by Assistant U.S. Attorney John S. Davis.
It is unclear whether a similar restitution agreement is in place in Massachusetts. A state DOR spokesperson did not immediately return a request for comment.
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