A Rockville Centre man faces up to 6 months in prison after pleading guilty to smuggling untaxed cigarettes from Kentucky through an upstate Indian reservation to Long Island smoke shops, prosecutors said
Joseph Ruda, 62, and his closely held corporation, Gutlove and Shirvint Inc. of Long Island City, pleaded guilty Tuesday to cigarette smuggling before Chief U.S. District Judge William M. Skretny, according to a news release from the U.S. attorney's office for the Western District of New York.
The release said Ruda was part of a scheme to ship untaxed cigarettes from New York to Kentucky that were then mailed to other states. The scheme including not filing proper forms with Kentucky state officials and other states where the untaxed cigarettes were shipped.
The scheme violated the Jenkins Act, which regulates mail-order sales of cigarettes, and resulted in a loss of nearly $175,000 in excise taxes for the state of Kentucky, the release said.
Ruda also pleaded guilty on behalf of his company, Gutlove and Shirvint Inc. Prosecutors said the company used the ruse of shipping the untaxed cigarettes to several smoke shops on the Cattaraugus Indian Reservation, where they were immediately transferred to a second truck and sent back to the Peace Pipe Smoke Shop on the Poospatuck Indian Reservation in Mastic.
The cigarettes were then resold in bulk to bootleggers who then sold them in New York City. This resulted in a loss to the New York State Office of Finance and Taxation of more than $1.4 million, the release said.
Ruda faces up to 6 months in prison when sentenced on Feb. 3, and his company faces a fine of $250,000.
Also, Ruda and his company agreed to forfeit profits from the scheme, including a $600,000 monetary judgment that both he and the corporation are equally obligated to pay to the government.
Ruda also will forfeit $325,000, in cash, to the government before his sentencing, the release said.