A lengthy multi-agency investigation into bootleg cigarettes and counterfeit tax stamps has led to 14 felony counts against a St. Paul man who once ran an illicit operation, officials said on Friday.
Ibrahim Elmeligy, 49, is charged in Ramsey County District Court with making or possessing counterfeit tax stamps and buying tobacco from an unlicensed seller.
Elmeligy's defunct shop, Abe's A1 Tobacco at 2303 White Bear Av. in Maplewood, had been targeted by investigators as far back as 2008 for allegedly reselling stolen cigarettes and other infractions in a small black market that deprived Minnesota of tax revenues, according to a criminal complaint.
Though similar cases may be under investigation, this is one of only two such cases filed in as many years in Ramsey County, prosecutors said.
Elmeligy was charged Wednesday after years of undercover stings by the U.S. Bureau of Alcohol, Tobacco and Firearms, New Hope and Maplewood police and the Dakota County Sheriff's Office.
On Thursday, another man pleaded guilty in a similar scheme, said Assistant County Attorney John Ristad.
That man, Hamza A. Abualzain, 22, of Columbia Heights, had been caught with $33,430 worth of tobacco products stuffed into a van after buying them at a discount store last February in Chicago, where he paid a lower rate.
"He would rent a panel van, drive to Illinois, buy as much tobacco as he could find," and then drive back to Minnesota to sell it to people from whom he had taken orders, Ristad said.
"By paying the lower tax rate," he said, "Abualzain avoided approximately $23,380 in Minnesota taxes."
The ATF, which is leading the investigation, has stepped up such probes nationwide since 2003 under its Tobacco Diversion program, which deals with the interstate transportation, possession and sale of non-state-tax paid cigarettes and chewing tobacco.
Those making and distributing contraband tobacco products are reaping big money by evading federal and state excise tax payments, the ATF says.
In the Elmeligy stings, beginning in February 2008, the undercover agents allegedly bought hundreds of cigarettes with phony tax stamps at the store or nearby, court papers say.
On at least nine different occasions, Elmeligy would meet up with undercover officers for sales in parking lots, typically at the nearby Maplewood Mall and a grocery. On Jan. 26, 2009, for example, he gave agents $8,650 in cash for 10 cases of cigarettes, the complaint alleges.
"All of the cartons sold during this investigation bore counterfeit tax stamps -- a fact made known to the defendant by the undercover officers on multiple occasions," Ristad wrote in the complaint. "Nor were the undercover officers licensed to sell cigarettes -- a fact that was apparent in light of the officers stating that the tax stamps were fake and that the cigarettes were stolen."
Ramsey County's latest prosecutions show that the investigations are complex and time-consuming, which is why it took so long to file charges against Elmeligy.
Elmeligy could not be reached for comment Friday.
Tim King, agent in charge of the ATF field office in St. Paul, said he could not comment on an active investigation.
The ATF says on its website that terrorist organizations and other criminal organizations have increasingly trafficked tobacco products, but there's no evidence showing any links to terrorist funding in the two cases that Ramsey County has prosecuted, Ristad said.
Before 2003, the ATF averaged about 40 new probes annually into the schemes. But since then, the ATF has started an average of 131 investigations per year.
Joy Powell • 651-925-5038