United States Flag
Official Website of the Department of Homeland Security

Report Crimes: Email or Call 1-866-DHS-2-ICE

Contraband
09/30/2008

Inland Empire man sentenced for role in contraband cigarette trafficking ring

RIVERSIDE, Calif. - An Inland Empire man has been sentenced to 42 months in prison and ordered to pay nearly $1 million in restitution to the State of California for his role in a ring that trafficked counterfeit cigarettes and cigarettes bearing counterfeit California tax stamps into the United States. According to court documents, the ring's activities deprived the State of California of more than $3 million in tax revenues.

Daniel Araya, 43, of Lancaster, Calif., was sentenced here late yesterday by United States District Judge Stephen G. Larson in Riverside. Araya previously pleaded guilty to trafficking contraband cigarettes and smuggling goods into the United States.

As part of his sentence, Araya will be required to pay the State of California $908,271 in restitution, the estimated tax loss the state suffered as a result of Araya's criminal activity. The State of California imposes a tax of 87 cents on each pack of cigarettes distributed within the state. State law requires that each cigarette pack bear a tax stamp as proof that the state cigarette tax has been paid.

Araya was one of 13 defendants charged in connection with the cigarette trafficking scheme that came to light during a nearly three-year undercover probe by U.S. Immigration and Customs Enforcement (ICE) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). ICE and ATF received substantial assistance in the case from the California Board of Equalization, the Los Angeles County Sheriff's Department, the Internal Revenue Service and the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney's Office for the Central District of California.

Between August 2002 and January 2005, Araya distributed more than 1 million packs of cigarettes bearing counterfeit tax stamps. Some of the cigarettes were counterfeits that had been unlawfully smuggled into the United States from China. The defendants evaded the California tax by affixing counterfeit tax stamps onto packs of cigarettes, which were then sold at smoke shops and other retail locations throughout the Southland.

In addition to Araya, 12 others have been convicted as a result of the investigation:

  • Samir Jamil Jaber, of Corona, pleaded guilty to conspiracy and trafficking contraband cigarettes and was sentenced to 24 months in prison and ordered to pay $1,484,785 in restitution;
  • Adel Muhammed Shahin, of Rancho Cucamonga, pleaded guilty to conspiracy and smuggling goods into the United States and was sentenced to 21 months in prison and ordered to pay $400,836 in restitution;
  • Adnan Bawaneh, of Victorville, pleaded guilty to conspiracy and trafficking contraband cigarettes and was sentenced to three years probation and ordered to pay $400,836 in restitution;
  • Rabi Ayash, of Sylmar, pleaded guilty to trafficking contraband cigarettes and was sentenced to three years probation and ordered to pay $37,776 in restitution;
  • Sivly Hang, of Moreno Valley, pleaded guilty to trafficking contraband cigarettes and smuggling goods into the United States and was sentenced to two years probation and ordered to pay $14,920 in restitution;
  • Ritesh Arvindbhai Patel, of Cerritos, pleaded guilty to trafficking contraband cigarettes and smuggling goods into the United States and was sentenced to 8 months in federal prison and ordered to pay $250,000 in restitution;
  • Jayesh Kumar RaichandbhaiThakkar, fled after pleading guilty to conspiracy and trafficking contraband cigarettes and remains a fugitive;
  • Lisa Montoya, of Las Vegas, pleaded guilty to trafficking contraband cigarettes and was sentenced to three years probation and ordered to pay $76,000 in restitution; and
  • Bart Montoya, of Las Vegas, pleaded guilty to a misdemeanor and was ordered to pay $76,000 in restitution.