Locations in Smithfield, Four Oaks used as ‘Stash Houses’
A total of 31 people and one business have been indicted by a federal grand jury for participating in a scheme to defraud the federal government, the States of North Carolina, New York, and Virginia of millions of dollars in tax revenues from the sale of cigarettes.
The investigation, called Operation Southern Lights, is an effort to end large scale tax fraud and to hold these defendants accountable for the millions in lost tax revenue as the result of their illegal scheme. The individuals charged are:
- Justin Brent Freeman, 36
- Malek Hamoud Alsaidi, 40
- Ibrahim Ahmed Alsaidi, 43
- Sadek Dahan Shahbain, 38
- Ayed Yahya Ali Alsham, 37
- Alshami Yahya Ali Alshami, 35
- Mohamed Hafed Abdou, 39
- Mohamed E Ould El Bechir, 43
- Akram Ali Amer, 32
- Mohamed Yeslem Ould Izid Bih, 40
- Mohammed Saaid Darweesh, 30
- El Hassen Hamadi, 42
- Musheer Mohammed Hezam Al Naqeb, 21
- Ali Mohammed Mashli Al Qadhi, 41
- Mohamed Mounir, 39
- Aied Awad Shibli, 50
- Shibli Abu Issa Shibli, 51
- Manar Mohammed Talal-Mustafa, 40
- Mohammed Nael Mahmou Khalayfa, 28
- Saleh Mohammed Abdeljawad, 39
- Kaid Mohamed Addailam, 32
- Amr Mousa Alhalemi, 22
- Ahmed Khalayfa, 21
- Rawhi Abdel Jabbar Khams Awad, 62
- Ali Aied Shibli, 26
- Amchad Rawhi Khamis Awad, 31
- Wachdi Rawchi Khamis Awad, 33
- Abdallahi Mohamed Elhafedh, 43
- Ahmed Elhoussein, 54
- Dedde Cheikh, 39
- Arafat A. I. Abuhammoud, 34
The grand jury indictment alleges that the 31 individuals and the one business engaged in a conspiracy, beginning in 2018 and continuing until at least June 2019, to ship, transport, receive, possess, sell, distribute and purchase cigarettes, in quantities exceeding 10,000 cigarettes, which bore no evidence of the payment of applicable State or local cigarette taxes in the state and locality where they were found. The object of the conspiracy was to profit from the purchase of cigarettes with cash in North Carolina, drive those cigarettes to the northeast, and sell them without paying the applicable sales and excise taxes.
It is alleged in the indictment that members of the conspiracy would repeatedly purchase large quantities of cigarettes from Justin Brent Freeman, age 37, of Hope Mills, North Carolina, through a business he operated named Freeco, Inc. in Fayetteville, North Carolina, as well as from other cigarette wholesalers in Fayetteville, Raleigh and Goldsboro, and then transport those qualities of cigarettes to storage locations for future shipment to New York City.
The difference between the cost of a carton of cigarettes in North Carolina and the cost of the same carton in the northeast is as much as $54 more in places like New York City. For example, the state excise tax on a carton of cigarettes in 2018-19 in North Carolina was $4.50 per carton. In New York State the tax is $43.50. New York City adds an additional $15 per carton excise tax for a total of $58.50, a $54 difference in taxes when compared to North Carolina.
According to the indictment, a commercial van filled with cigarettes purchased in North Carolina and resold in New York City could result in a gross profit of as much as $194,400.
According to a copy of the federal indictment obtained by JoCoReport, in October 2018, Manar Mohammed Talal-Mustafa, Mohammed N.M. Khalayfa and an unknown individual purchased over 1,050 cartons of cigarettes in Fayetteville and loaded them into two vans. The vans traveled to a stash house at an undisclosed location in Four Oaks where the cigarettes were off-loaded and stored for transportation at a later time to the northeast.
In November 2018, the federal indictment alleges Mana Mohammad Talal-Mustafa purchased 660 cartons of cigarettes in Fayetteville. He met Saleh Mohammed Abdeljawad in Dunn where he transferred about half the cigarettes. Talal-Mustafa then drove the van to an undisclosed storage warehouse in Smithfield. Later, Kaid K. Addailah loaded 879 cartons of cigarettes from the Smithfield storage unit into a rental vehicle and traveled from Smithfield, NC to Henrico County, Virginia.
In March 2019, Ali Aied Shibli traveled to an undisclosed private garage in Four Oaks used as a stash house for cigarette trafficking. Ali Aied Shibli met with Aied Awad Shibli at the location. Ali Aied Shibli backed a van into the unit and unloaded cigarettes into the building for interstate shipment to New York.
On April 3, 2019, prosecutors allege $45,136.17 in cash was used to buy 803 cartons of cigarettes from Justin Freeman and Freeco, Inc. in Fayetteville. The cigarettes were transported to the stash house in Four Oaks by Amchad Rawhi Khamis Awad and Rawhi Abdel Jabbar Khams Awad. The following day, Amr Mousa Alhalemi traveled to Four Oaks to pick up 840 cartons of cigarettes, which were loaded into a rental Ford Explorer and driven to Virginia.
On April 12, 2019, Ali Aied Shibli traveled to the Four Oaks stash house and backed a van inside the building. The following day, he again traveled to the Four Oaks stash house and met with Manar Mohammed Talal Mustafa.
On May 7, 2019, Ali Aied Shibli purchased over 1,020 cartons of cigarettes in Fayetteville with $58,479 in cash. He transported the cigarettes to Four Oaks where half the cartons were left. Ahmed Elhoussein backed a sport utility vehicle into the garage at the stash house and loaded the cigarettes which were later transported to Richmond, Virginia.
On May 8, 2019, Aied Awad Shibil traveled to Four Oaks and off loaded cigarettes for interstate transportation. Dedde Cheikh traveled to Four Oaks and left with the cigarettes to Richmond, Virginia.
After purchasing the cigarettes from Freeman and Freeco, Inc., or from one of the other retailers, members of the conspiracy would then prepare for transporting the cigarettes to the Northeast by using a full size van or rental truck and cross into the Virginia and travel to either Richmond or Alexandria. In Virginia, the cigarettes would be transferred to another member of the conspiracy who would continue the transportation to Syracuse, New York. There, additional members of the conspiracy would transfer the cigarettes to an as yet unknown individual for transportation and distribution in the New York City area.
If convicted for the general conspiracy to traffic in contraband cigarettes, each defendant faces up to five years in federal prison and fines of up to $250,000 or twice the gain obtained, whichever is greater. If the defendants are convicted of money laundering, as alleged, they each face up to 20 years imprisonment, a $500,000 fine or twice the value of the property involved in the transaction, whichever is greater, or both.