Holyoke Man Arrested, Arraigned in Connection with Major Multistate Illegal Tobacco Distribution Network
BOSTON – A Holyoke man has been arrested and arraigned in connection with running a major illegal tobacco distribution network throughout Massachusetts, Connecticut and Rhode Island, Attorney General Maura Healey announced today.
Pedro T. Perez, a.k.a. Jose H. Perez, age 53, of Holyoke, was arrested Thursday in Holyoke and was charged with one count each of Conspiracy to sell 12,000 or More Unstamped Cigarettes, Conspiracy to Possess or Transport 12,000 or more Unstamped Cigarettes, Conspiracy to Forge, Alter, or Counterfeit Cigarette Excise Stamps, Conspiracy to Commit Money Laundering and Conspiracy to Commit Tax Evasion.
He was arraigned Thursday in Holyoke District Court and pleaded not guilty to the charges and was held on $5,000 cash bail, with the condition that Perez be monitored via GPS and not leave Massachusetts. He is due back in Holyoke District Court on June 7 for a pretrial hearing.
“We allege that this defendant was running a multi-state criminal operation that involved transporting, selling and distributing illegal, untaxed cigarettes to convenience stores across Massachusetts and across state lines,” said AG Healey. “We will continue to work with our state and federal partners to crack down on those who evade the law and rob our state of needed tax revenue.”
Today’s case is the result of a joint operation with Massachusetts State Police assigned to the AG’s Office, the Massachusetts Department of Revenue (MA DOR), the Connecticut Department of Revenue Services’ Investigations Section (DRS SIS), the Rhode Island Department of Revenue‘s Special Investigation Unit (RI DOR), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Holyoke Police Department, and State Police assigned to the Hampden County District Attorney’s Office.
“We hope that this operation and the hard work of our partners and the ongoing efforts of the Illegal Tobacco Task Force may serve as a model for future cooperative investigations to address the significant problem of illegal tobacco smuggling,” said Massachusetts Commissioner of Revenue Michael J. Heffernan. “Collecting required state taxes is a core mission of the Department of Revenue and is essential to ensuring all taxpayers are treated fairly”
“Tobacco diversion is a serious crime that diverts substantial tax revenue from state governments to the pockets of criminals which is absolutely unacceptable,” said Daniel J. Kumor, ATF Special Agent in Charge, Boston Field Division. “We will continue to work closely with our law enforcement partners throughout New England to identify and dismantle any criminal organization involved in the illegal trafficking of tobacco products.”
“This is a successful example of what states can do when we work together to stop trafficking in illegal untaxed tobacco products,” said Connecticut Commissioner of Revenue Kevin Sullivan. “We are grateful to Massachusetts for taking the lead and look forward to continuing our joint enforcement efforts.”
“This is the result of teamwork and of close cooperation and hard work among investigative authorities in multiple jurisdictions, including Massachusetts, Rhode Island, and Connecticut,” said Rhode Island Acting Tax Administrator Neena S. Savage. “We are proud of the efforts that the Rhode Island Division of Taxation’s Special Investigation Unit made over multiple months in this complex investigation. We will continue to work together with state and federal agencies to make sure that the law is upheld.”
Authorities allege that Perez regularly delivered black trash bags full of cartons and half cases of illegal untaxed cigarettes to individuals, other known illegal cigarette traffickers in Massachusetts, and convenience stores in Springfield, Holyoke, Chicopee and Dorchester and throughout Connecticut and Rhode Island. Perez also allegedly sold illegal, untaxed cigarettes out of his home in Holyoke. Authorities allege that the cigarettes transported and sold by Perez either had no excise tax stamp, a requirement of all cigarettes sold in Massachusetts, or had a counterfeit excise tax stamp.
State Police assigned to the AG’s Office and investigators with the MA DOR began an investigation in November 2015 after they were contacted by Tax Enforcement Special Agents in the Special Investigations Unit of the Connecticut DRS SIS and informed about the criminal operation. Authorities allege that Perez traveled to New York using U-Haul vans to obtain some of the illegal cigarettes and stored them at a U-Haul storage facility in Chicopee.
Authorities uncovered cash, counterfeit DOR tax stamps, more than 12,000 unstamped tax cigarettes and more than 12,000 unstamped cigarettes in packs with counterfeit excise stamps on them during the execution of a search warrant at a home linked to Perez in Holyoke on May 12.
The investigation against Perez remains ongoing. These charges are allegations and defendants are presumed innocent until proven guilty.
Representatives from the AG’s Office and MA DOR are working together as co-chairs of the Illegal Tobacco Task Force, which was created earlier this year, to combat contraband tobacco distribution throughout the state through civil and criminal investigative and enforcement actions. The Task Force also includes representatives from the Office of the State Treasurer, the Executive Office of Public Safety and the Department of Public Health.
This case is being prosecuted by Assistant Attorneys General Gina Masotta, of AG Healey’s Gaming Division and Amy Karangekis, Deputy Chief of AG Healey’s Western Mass Regional Office. The case is being investigated by State Police assigned to the AG’s Office, State Police assigned to the Hampden County District Attorney’s Office, Holyoke Police, financial investigators assigned to the AG’s Gaming Enforcement Division, the AG’s Digital Evidence Lab, the Massachusetts Department of Revenue, the Bureau, of Alcohol, Tobacco and Firearms, the Connecticut Department of Revenue Services’ Special Investigations Section, the Providence Police Intelligence Unit and the Rhode Island Department of Revenue, Division of Taxation, Special Investigation Unit.