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New York Untaxed Cigarette Crimes: Potential Criminal Liability without Actual Possession or Involvement in a Criminal Transaction

Most New York tax crime lawyers who are also experienced criminal defense attorneys represent clients charged with committing “tax fraud acts” as defined and identified in New York State Tax Law sections 1802, 1803, 1804, 1805 and 1806. These New York tax crimes, however, are certainly not the only potentially felony offenses you may be exposed to should you be arrested or indicted for an illegal withholding or stealing of tax monies. In fact, one of the more common tax crimes investigated in Queens, Brooklyn, the Bronx, Manhattan and even Westchester and Long Island, tax crimes relating to cigarettes has spiked in recent years. Codified throughout various subsections of New York Tax Law 1814, failure to pay taxes on certain tobacco products or the possession and transportation of untaxed cigarettes is can potentially lead to a significant period of incarceration. The ease by which prosecutors in New York can charge a person with violating one of the many crimes relating to improperly or untaxed cigarettes is highlighted by the subject of this blog entry, People v. Ran Yang, 2009 NY Slip Op 50793(U) [23 Misc 3d 1117(A)].

In pertinent part, New York City Administrative Code 11-4012 (a)(1) states that if you willfully attempt in any manner to evade or defeat any tax imposed [in this section] or the payment of that tax you are guilty of a misdemeanor. Further, New York City Administrative Code 11-4012 (b) makes it a misdemeanor crime if you possess or transport for the purpose of sale any unstamped or unlawfully stamped packages of cigarettes subject to tax. Alternatively, if you sell or offer for sale unstamped or unlawfully stamped packages of cigarettes it is also a misdemeanor crime. These two criminal violations of the New York City Administrative Code generally mimic, but are distinct crimes, from New York State Tax Law 1814(a)(1) and New York State Tax Law 1814(d). The latter of these crimes involve the illegal transportation and sale of unstamped or unlawfully stamped cigarettes while the former is a more generic tax crime.

Dealing with the misdemeanor cigarette tax fraud as well as other misdemeanor New York cigarette tax crimes, it was alleged in a misdemeanor complaint that a police officer, while engaging in a transaction with a co-defendant to purchase cigarettes, observed the defendant behind the counter. The defendant attempted to grab ten packages of cigarettes that had a bogus stamp an not the required cigarette tax stamp required by New York City and New York State. Ultimately, the police seized the cartons and boxes. Both Yang and the co-defendant who actually accepted the money to purchase the cigarettes were arrested.

The defendant sought a dismissal of the charges for facial insufficiency because he never actually possessed the untaxed cigarettes or actively participate in the sale of untaxed cigarettes to the undercover officer.

Very simply, the court denied dismissal on multiple grounds. First, the court found that the defendant had dominion and control over the cigarettes when he attempted to grab them. Further, the defendant was not merely present when the co-defendant exchanged money, but took affirmative steps, was in earshot and in sight of what transpired. Despite the defendant’s contention that the complaint did not establish his intent to sell the improperly stamped cigarettes, the court found that common sense was critically at play and that reviewed as a whole, it could be concluded by a fact finder that his intent was to sell the cigarettes.

As noted by the court:

“Again, facial sufficiency does not require that the accusatory instrument prove the defendant’s guilt beyond a reasonable doubt, not does it require that the defendant’s motive for his actions be proven within the four corners of the complaint. (People v Henderson, Id. at 680). The Information is facially sufficient if the factual section of the complaint contains allegations of an evidentiary nature demonstrating reasonable cause to believe that the defendant committed the offenses charged (CPL ยงยง 100.15; 100.40[1][b]).”

“The defendant further argues that the complaint fails to set forth facts that would “give rise to an inference that Mr. Yang willfully attempted to evade or defeat payment of tax.” As stated above, this court finds that the facts as set forth in the complaint are sufficient to show that [*5]the defendant possessed the untaxed cigarettes and that he possessed them with the intent to sell them. The fact that the cigarettes did not bear the required New York City and State tax stamps, together with the fact that the defendant was not an agent of the State Department of Taxation gives reasonable cause to believe that Defendant Yang did not intend to see to it that New York State received any payment for the taxes due on the sale of the cigarettes in question.”

Although the defendant’s motion to dismiss was denied, the defendant may have a solid argument at trial that he was neither aware of the illegal nature of the cigarettes nor had the intent to sell the illegal cigarettes. Regardless, things could be much worse. New York State Tax Laws are not merely misdemeanors. There are many felony crimes with more significant punishment.

To learn more about New York Tax Laws and Crimes, follow the highlighted links. Additional information on New York crimes of theft and larceny, review both this blog, NewYorkTheftAndLarcenyLawyers.Com, the NewYorkCriminalLawyerBlog.Com and CrottySaland.Com. All of the extensive materials on various crimes, statutes and legal decisions are hyperlinked below.

Crotty Saland PC, a New York criminal defense firm established by two former Manhattan prosecutors, is located in lower Manhattan. The New York criminal defense attorneys and New York Tax Crime lawyers at Crotty Saland PC represent clients throughout the metro New York City and suburban area.

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