Smokes bought in N.C. were illegally sold in Calif.
Jump to full article: Raleigh (NC) News & Observer, 2010-03-10
Author: MANDY LOCKE - Staff Writer
Intro: Federal prosecutors from Raleigh boarded planes Tuesday for Los Angeles, hoping to close a four-year, multimillion dollar cigarette smuggling case.
Avedis Djeredjian, a California man who owned a tobacco shop in Glendale, Calif., operated a scheme in which he bought cheap, untaxed wholesale cigarettes in North Carolina and then sold them at nearly triple the rate, pocketing steep taxes owed to California.
Prosecutors were in the air when they learned that today's sentencing had been canceled, another complication of prosecuting a case in a courthouse 3,000 miles away, instead of downstairs. Raleigh-based prosecutors and agents have been criss-crossing the country prosecuting Djeredjian for years. In 2008, the team moved to Los Angeles for a monthlong trial.
"This has taken so long," said George E.B. Holding, U.S. attorney for the Eastern District of North Carolina. "We've had such a steep learning curve."
Holding and his prosecutors didn't set out to pursue a case three time zones away, nor did they foresee the resources it would demand. Holding could not say how much his office has spent on the prosecution. A grand jury in Raleigh indicted Djeredjian and his crew in 2006, and prosecutors prepared to haul Djeredjian out of California to try him in North Carolina.
But Djeredjian's lawyers persuaded a judge to move the case to Djeredjian's home state to ease the burden and expense on the 70 or so witnesses they planned to call. . . .
In 2002, a federal jury in Charlotte convicted two Lebanese citizens of diverting millions of dollars in cigarette-smuggling proceeds to the Islamic group Hezbollah by shipping North Carolina cigarettes to Michigan for resale.
Some say North Carolina also makes it easier to ship cigarettes to other states because it doesn't require tax stamps be affixed on each pack sold, as most other states do. According to The Associated Press, state lawmakers are considering restoring the stamps, in part to discourage smuggling of cigarettes into the state from South Carolina, which has a 7-cent-per pack tax and also doesn't use stamps. North Carolina's 45-cent tax has grown ninefold since 2005, creating a cross-border difference of $3.80 per carton.
. . .
Djeredjian's scheme in California made him millions, which prosecutors hope to collect as part of his punishment. Djeredjian hired Armenian immigrants to buy cigarettes in Eastern North Carolina at discount retailers such as J.R.'s in Johnston County. Djeredjian's team stockpiled the smokes at a Raleigh warehouse, then shipped them west to a team set up to distribute them to retailers around Los Angeles. Djeredjian printed fake California revenue stamps
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