A federal judge in Sacramento has sentenced a Los Angeles tobacco distributor to 15 months in prison and ordered him to pay $880,000 to the state of California for his participation in a scheme to defraud the state of more than $800,000 in excise taxes.
Jawid Wahidi, 34, the owner of LMS International, was sentenced Wednesday. He pleaded guilty in U.S. District Court on May 10 to charges of mail fraud.
According to U.S. Atty. Benjamin B. Wagner, Wahidi filed statements with the California Board of Equalization that “dramatically under-reported the amount of tobacco he sold in the state.”
Wahidi sold the majority of his tobacco products, mainly cigars and chewing tobacco, to California buyers at untaxed prices and without official invoices, Wagner said.
In a similar case, Wagner announced that Atef Shehata, 62, also of Los Angeles, pleaded guilty Wednesday to mail fraud by engaging in similar behavior. Shehata, the owner of Classic Wholesale, ordered and received about $2.5 million in untaxed tobacco products from a Las Vegas company, Wagner said.
Shehata is scheduled to be sentenced by U.S. District Judge John A. Mendez on July 10. He faces a maximum penalty of 20 years in federal prison.
The two investigations were carried out by a task force that includes the U.S. Attorney’s Office, the California Attorney General’s Office, the U.S. Bureau of Alcohol, Tobacco and Firearms and the California Board of Equalization.