WEST OCEAN CITY — Two local men, arrested last October for their roles in a vast cigarette smuggling and tax evasion conspiracy after a raid by federal officials at their West Ocean City home, pleaded guilty last week in a New York Supreme Court and now await sentencing later this month.
Last October, federal officials raided the West Ocean City home of Basel and Samir Ramadan for the second time in six years as part of a larger investigation into a vast cigarette smuggling and money-laundering investigation. During the raid, Federal Bureau of Investigation (FBI) and Homeland Security Investigation (HSI) official, along with allied local law enforcement partners, searched the Ramadan’s West Ocean City home as part of Operation Sidestep, a months-long investigation into an untaxed cigarette smuggling, money-laundering and tax evasion scheme carried out by the two local men.
Last Thursday, both Basel and Samir Ramadan each pleaded guilty to a single conspiracy charge, the highest charge against each defendant. Sentencing has been set for Aug. 26 in King’s County Supreme Court in New York.
The 21-count indictment charges the Ramadans and their alleged co-conspirator, identified as Fahd Muthana, also known as “Ahmed Abdullah,” 39, of Brooklyn, N.Y. in the three-person cigarette trafficking ring allegedly responsible for distributing over 1.25 million cigarettes and evading nearly $430,000 in tax liability.
Code-named Operation Sidestep, federal, state and local law enforcement agents concluded a months-long investigation into a network that allegedly evaded New York state and New York City excise and sales taxes by trafficking more than 1,500 cartons of untaxed cigarettes per week from Virginia to be sold in retail shops in Brooklyn. The investigation was led by the New York State Attorney General’s Organized Crime Task Force (“OCTF”) in partnership with the Intelligence Bureau of the New York Police Department (“NYPD”) and Homeland Security Investigations (“HSI”). It is alleged that a total of approximately 1,255,000 cigarettes were smuggled into Brooklyn, evading a total of $426,700 in tax liability due to New York State and New York City.
During the raids at the Ramadans’ West Ocean City homes last October, federal, state and local authorities seized three handguns, one shotgun, three vehicles and over $312,000 in cash. In addition, over 341,000 untaxed cigarettes were seized from the suspects’ storage location in Brooklyn.
In May 2013, federal officials concluded an investigation into a multi-million-dollar cigarette smuggling operation with raids on two locations in and around the resort area including the Ramadans’ homes. Federal officials on the same day raided the Ramadans’ offices over the Subway restaurant they owned at Sunset Drive near 26th Street in Ocean City.
At the Ramadans’ West Ocean City homes in the Oyster Harbor community, $1.4 million in large black bags was recovered, along with 20,000 cartons of untaxed cigarettes. Also seized were numerous vehicles and other property belonging to the Ramadans. The Ramadans allegedly conducted the vast cigarette smuggling operation out of their Ocean City properties, but 14 other co-conspirators, from transporters to distributors to resellers, were also rounded up at locations all over the mid-Atlantic region.
According to the New York Attorney General’s Office, the Ramadans and their co-conspirators allegedly funneled thousands of cartons of untaxed smokes and millions of dollars in ill-gotten revenue through Ocean City and Worcester County from a wholesaler in Virginia to a distribution warehouse in Delaware, from whence the illegal, untaxed cigarettes were distributed to retail outlets all over New York City and upstate.
Following the raids in May 2013, a New York grand jury handed down formal indictments against the Ramadans and their alleged 14 co-conspirators. According to the indictment, the Ramadans were successful in disguising the illicit proceeds and funneling through local banking institutions and allowed them to continue to finance the purchase of thousands of cartons of cigarettes from a Virginia wholesaler.
In that case, Basel Ramadan ultimately pleaded guilty to all 198 counts in the indictment against him and was sentenced to four to 12 years and was also ordered to forfeit $1.2 million in ill-gotten gains. Samir Ramadan pleaded guilty to enterprise corruption in 2014 and was sentenced to a maximum of four years and a minimum of two years. Another co-conspirator in that case, Youseff Odeh, pleaded guilty to enterprise corruption and second-degree conspiracy for his role in an alleged murder-for-hire plot targeting witnesses in that case and was also sentenced to two- to four-years.
