BONOKOSKI: One man rips off Canadian taxpayers for a half-billion
Author of the article:Mark Bonokoski
Publishing date:Jun 05, 2021 • 4 hours ago • 3 minute read • 33 Comments
A vehicle stop on Hwy. 401 in Napanee in January 2019 led to the seizure of 296 cases of illegal cigarettes packed into a U-Haul truck.
A vehicle stop on Hwy. 401 in Napanee in January 2019 led to the seizure of 296 cases of illegal cigarettes packed into a U-Haul truck.
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There is a network of bandits running the U.S.-Canada border with tonnes of contraband cut-rag tobacco destined for illicit cigarette manufacturers on the Six Nations reserve near Brantford and Quebec’s Kahnawake near Montreal.
The public sees the “victimless crime” of cheap smokes selling for $4 a pack rather than legit cigarettes at the local convenience store costing upwards of $18, with more than 70% of the sticker price being taxes.
What the public doesn’t see, however, is these tonnes of machine-ready tobacco costing us multi-millions in lost tax revenues that, for example, could go a long way towards mending a goodly portion of the health care system.
Take one man. Yes, one man.
Phil Howard, 55, of Pink Hill, N.C., was recently sentenced to almost seven years in prison for smuggling cut-rag into Canada via the Akwesasne reserve on Cornwall Island at Cornwall, Ont. The island’s unique in that it straddles the borders of Ontario, Quebec and the United States, making it a hot zone for smuggling.
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The amount of tobacco Howard smuggled into Canada over the years is staggering, with a court in Raleigh, N.C. being told the tax loss to Canada totalled $600 million.
That’s not a typo — Six hundred million dollars in tax losses to Canada alone. And via just one man running contraband tobacco.
Our federal and provincial politicians, however, basically just let it happen because they don’t know how to play a cat-and-mouse game and won’t invest serious money in the special law enforcement and border-authority units that can.
Prosecutors in North Carolina got Howard much like they once got Al Capone. They got him for filing false tax returns and conspiracy to launder money..
Court was told Howard made at least 220 runs from the tobacco belt of Wilson, N.C. — 18-wheelers hauling 53-foot trailers loaded to the hilt with cut-rag tobacco — to the New York portion of Akwesasne or directly into Canada.
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If dropped off in Akwesasne, local smugglers with high-speed boats and night-vision goggles, or sled-drawing snowmobiles in the winter, got the cut-rag across the St. Lawrence River to drop-off areas to be picked up and hauled to Kahnawake or Six Nations.
But it’s like whack-a-mole. One smuggler goes down but others pop up.
As reported in a press release, U.S. District Judge James Dever III also ordered Howard to serve three years of supervised release and to pay $1,062,192 in restitution for tax losses to the United States and forfeit $2,232,814 as proceeds of his money laundering activity
(In the U.S., tobacco is deemed an agricultural product; in Canada it’s a controlled substance.)
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“This prosecution demonstrates the far-reach of organized crime and the success of international and multi-district law enforcement cooperation in holding those individuals responsible for their criminal conduct, whether it be obstruction of justice, money laundering, or tax evasion,” said acting U.S. Attorney G. Norman Acker III. “Our office will continue to vigorously pursue the investigation and prosecution of such crimes.”
Then the Internal Revenue Service’s Acting Special Agent Mona Passmore weighed in.
“To build faith in our nation’s tax system, honest taxpayers need to be reassured that IRS Criminal Investigation is diligent when it comes to enforcing the tax laws, such as Howard’s attempt to underreport his income,” she said,
As for Canada, well, it was out of Dever’s jurisdiction and would therefore have to swallow the bitter truth that one man was able to deprive Canadian taxpayers of $600 million in tax revenues by successfully smuggling millions of kilos of cigarette-ready cut-rag into Canada.
And there was no one on our side of the border who stopped him.
markbonokoski@gmail.com
There is a network of bandits running the U.S.-Canada border with tonnes of contraband tobacco destined for illicit cigarette manufacturers.
torontosun.com