Attorney General's Organized Crime Task Force And State Tax Department Shut Down Conspiracy To "bootleg" Motor Fuel
NEW YORK, NY (January 24, 2007)—Attorney General Andrew M. Cuomo and Barbara G. Billet, the Acting Commissioner of the State Department of Taxation and Finance, today announced that a Brooklyn Grand Jury indicted seven individuals and four corporations for their alleged involvement in a scheme to illegally import untaxed gasoline and diesel motor fuel from New Jersey into New York. All of the defendants are charged with various tax felonies and conspiracy.
The indictment charges that between March and December 2005, the defendants conspired to transport and distribute more than 2,900 gallons of untaxed motor fuel from storage tanks in New Jersey to New York gas stations, where the fuel would be sold. According to the indictment, the defendants who distributed the fuel were not legally registered in New York as legitimate distributors of diesel motor fuel, and the purpose of their operation was to avoid paying fuel taxes. As part of the scheme, for example, untaxed fuel from the Conoco Phillips Terminal, Linden, New Jersey, was distributed to gas stations in New York State. Some companies involved in the scheme allegedly filed false documents in furtherance of the conspiracy.
“Gasoline bootlegging and organized crime will not be tolerated in New York," Cuomo said. “My office has criminal jurisdiction to prosecute organized crime rings. State prosecutors will continue to work with state agencies to prosecute groups and their associates that conspire to commit crimes in New York.”
Billet said, “These indictments were the result of teamwork between the Tax Department and the Attorney General’s office. Our offices will continue to work together to uncover and shut down schemes to illegally evade taxes by importing untaxed fuel into New York.”
The individuals charged in the indictment were: Anatoly Sagalov, 63; Yevgeny Shubovich, 47; Adik Khayumov, 34; Vladimir Podvighin, 46; Arthur Fuzailov, 38; Arthur Mousesyan, 44; and Paul Batushanskiy, 32. They were all residents of Brooklyn, New York. Also charged with various tax felonies were several corporations that allegedly were utilized by the defendants to perpetrate their schemes: Union Trucking, Inc.; Petroleum Formuler, Inc.; KY Petroleum Group, Inc.; and AY Trucking Group, Inc.
Today’s indictment marks the third set of charges resulting from a three year investigation conducted by the Attorney General’s Organized Crime Task Force and the State Tax Department into bootleg gasoline schemes.
In July 2006, charges were brought against eight individuals and six corporations for similar conduct. In September 2006, an additional seven individuals and two corporations were indicted. All of the charges are merely accusations, and the defendants are presumed innocent until and unless proven guilty.
The cases are being handled by Assistant Deputy Attorney General David Paldy of the Organized Crime Task Force, under the supervision of Deputy Attorney General Christopher Prather, the head of the Task Force. The investigation was led by Tax Investigators Alec Zef and Janet Mullins, along with Forensic Account B. J. Stramezzi, under the supervision of Thomas Stanton, Director of Tax Enforcement, for the New York State Tax Department’s Petroleum, Alcohol and Tobacco Bureau, and by Organized Crime Task Force Investigators Kerry Buttner, Salvatore Landro, and Angel Lopez, under the direction of Supervising Investigator Diego Cruz.