A Naperville man has been sentenced to four years in prison for his role in an excise tax fraud scheme, according to the U.S. Attorney’s Office.
Rahman Lakhani and his two corporations, N. Ali Enterprises Inc. and 21st Century Distribution Inc., were convicted on 20 counts of mail and wire fraud and sentenced by U.S. District Judge Daniel J. Calabretta, a federal judge based in Sacramento, California, a news release from the U.S. Attorney’s Eastern District of California Office said.
In addition to Lakhani’s prison term, the two companies were each placed on three years probation and all three defendants ordered to pay more than $5.9 million in restitution, the release said.
Lakhani and the corporate defendants used warehouses in Illinois, Nevada and California to move more than $25 million in tobacco products across the United States and into California, submitting false excise tax returns to different state regulators designed to hide the size and value of the shipments, the release said.
“Ultimately, the (products were) sold into California on false invoices with the misrepresentation that tax had been paid,” the release said.
“In fact, Lakhani and the corporate defendants submitted or caused to be submitted false tax returns to the California Board of Equalization and the California Department of Tax and Fee Administration. As a result of the fraud, Lakhani and the corporate defendants defrauded the state of California of over $5.9 million.”
The deception not only allowed the defendants to earn additional profit but to undercut competitors who paid the excise tax, the release said.