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Judge vacates guilty plea in cigarette case

01:00 AM EDT on Thursday, August 27, 2009

By W. Zachary Malinowski

Journal Staff Writer

PROVIDENCE — A federal judge on Wednesday agreed to vacate the guilty plea of a Pawtucket man charged with selling illegal cigarettes, but she ordered him to pay thousands of dollars in back taxes for peddling packs of cigarettes that did not bear Rhode Island tax stamps.

Chief U.S. District Court Judge Mary M. Lisi told Hussam Ghanam, 38, that he was “a lucky man” and she warned him that she would not be as benevolent if he faced similar charges in the future.

“This could have ended not so well for you,” she said. “Frankly, if you had a [criminal] record, you would not be walking out of here with a diversion agreement.”

Lisi accepted the agreement after a brief meeting in her chambers with Ghanam’s lawyer, James McCormick, and John P. McAdams, a prosecutor from the U.S. Attorney’s office. She pointed out that Ghanam’s crime was nonviolent and that he was not a “ringleader” of the group charged with him. She also called the charge “a relatively minor offense.”

The case was continued for 60 days so that the lawyers can draw up the paperwork that will finalize the agreement.

Ghanam and two other men, Mohamed Amir Tatari, 45, of Johnston, and Bassam Khalil, 43, of Cumberland, were charged last fall with selling tens of thousands of cigarettes that were bought out of state.

According to federal prosecutors, the three men were business partners who arranged for the sale of 155 cartons of untaxed cigarettes to an undercover agent from the Alcohol, Tobacco, Firearms & Explosives agency at various locations across the state.

On July 24, 2008, a state trooper in Maryland stopped a vehicle that Ghanam was driving. Inside were 486 cartons of contraband cigarettes valued at nearly $25,000. Cigarettes are much cheaper in states such as South Carolina and Virginia. They are brought to Rhode Island and sold at a substantial profit.

State tax on a pack of cigarettes in Rhode Island is $3.46, compared with just 7 cents in South Carolina. Those are the highest and lowest tax rates in the nation.

McCormick, Ghanam’s lawyer, said that his client owes the state about $8,000 in unpaid taxes.

In June, Tatari was sentenced to a year’s probation after he pleaded guilty to three counts: conspiracy, and two counts of knowingly shipping, possessing, transporting, selling and distributing contraband cigarettes. He was ordered to repay the state $12,911 in taxes.

Khalil also has pleaded guilty to similar charges and is awaiting sentencing.

The state police, investigators from the state tax office and federal agents are looking to crack down on the illegal sale of out-of-state cigarettes to make sure that the state collects as much money as possible from smokers. Cigarette sales are the fourth-largest source of tax revenue in Rhode Island, annually generating more than $150 million.

bmalinow@projo.com

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