http://www.businessweek.com/ap/2013-01-08/ala-dot-investigators-make-2nd-1m-tax-evasion-case

AP News

Ala. investigators make 2nd $1M tax evasion case


MONTGOMERY, Ala. (AP) — State investigators have brought their second $1 million tax evasion case involving Alabama tobacco distributors.

The owners and operators of Northstar Wholesale in Birmingham, President Allaudin Merchant and Vice President Farhad Jiwani, have each been indicted on 44 counts of willful tobacco tax evasion and 77 counts of second-degree possession of a forged instrument. State Attorney General Luther Strange and state Revenue Commissioner Julie Magee said the men are accused of evading more than $1 million in state tobacco taxes from 2007 to 2010. The taxes involve cigar sales.

Merchant, 65, surrendered to the Jefferson County Sheriff's Department on Monday and Jiwani, 57, on Dec. 21, state officials said.

A manager at Northstar Wholesale said neither was available for comment Monday. Court records do not indicate whether they have an attorney yet.

A tobacco distributor in nearby Pelham, Shamin Ahmed Khan, pleaded guilty to tax evasion and criminal possession of a forged instrument in September. Khan, president of Capital Wholesale and Distribution, was sentenced in November to six months' imprisonment and was ordered to pay $1.7 million in taxes, interest and penalties.

Both Capital Wholesale and Northstar Wholesale supply goods to convenience stores. Revenue officials said Kahn altered invoices to make it appear he was selling T-shirts instead of cigars and paid no taxes on the cigars. Officials did not disclose details of the charges against Merchant and Jiwani.

If convicted, they could get up to five years in prison and fines up to $100,000 on each count of tax evasion and up to 10 years in prison and fines of up to $15,000 for each count of second-degree possession of a forged instrument.


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