CONCORD – United States Attorney Scott W. Murray announced today that Imtiaz Shaikh, 46, of Manchester pleaded guilty to one count of wire fraud in connection with a scheme to defraud the State of New Hampshire.
According to court documents and statements made in court, Shaikh’s scheme involved the purchase of tobacco products other than cigarettes, referred to as “other tobacco products” or “OTP,” from various suppliers located in Pennsylvania. Shaikh and others then transported the products to New Hampshire for sale to retail businesses. In New Hampshire, wholesale distributors of OTP must be licensed and are required to file reports identifying the quantity of OTP sold each month. During the period of the scheme identified in the charging document, New Hampshire taxed OTP at 65.03 percent of the wholesale sales price. Shaikh avoided most of the licensing and reporting requirements by conducting business through a number of shell corporations. Except for a single report filed in September 2014, Shaikh and the entities he created failed to pay the taxes owed to the State of New Hampshire. The state lost an estimated $1.5 million in tax revenue as a result of the scheme.
A sentencing hearing has been scheduled for October 16, 2018.
“Although no one likes to pay taxes, we all are required to follow the law,” said U.S. Attorney Murray. “This defendant’s fraud scheme deprived the state of lawful tax revenue in order to enhance his personal income. Those who choose to engage in schemes like this should understand that we are committed to the aggressive prosecution of individuals who engage in fraudulent conduct.”
“The guilty plea entered today by Mr. Shaikh brings an end to his elaborate scheme to avoid paying taxes through the sale and distribution of tobacco products. The state of New Hampshire and its taxpayers are the really the ones who have suffered the consequences of his actions. The FBI is committed to working with our law enforcement partners to stop this type of criminal activity, and make sure the taxpayers are made whole,” said Harold H. Shaw, Special Agent in Charge, FBI Boston Division.
Mr. Shaikh’s tax evasion scheme increased the burden on New Hampshire’s law-abiding citizens, forcing them to make up the difference,” said Kristina O’Connell, Special Agent in Charge, IRS Criminal Investigation, Boston. "Today, honest taxpayers have been reassured that no one is above the law. We will continue to collaborate with our law enforcement partners on these important investigations to protect the integrity of the American tax system."
The Federal Bureau of Investigation, the IRS Criminal Investigation, Boston, the New Hampshire State Police, the Manchester Police Department, the Salem New Hampshire Police Department, the Massachusetts State Police and the New Hampshire Department of Revenue Administration all participated in the investigation of this case. Assistant United States Attorney Donald A. Feith prosecuted the case.