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El Cajon's Salam Kalasho has been sentenced to four years in prison for evading state excise taxes in the sale of tobacco products, according to the U.S. Attorney's office for the Eastern District of California. According to documents introduced in court, Kalasho, president of distributor Pisces International, used multiple businesses in Arizona and California, multiple bank accounts under different names, and multiple sets of financial records in his scheme. He reported that 95% to 100% of his non-cigarette sales were being exported out of state, thus relieving him of excise tax liability in California. In reality, most of the products were sold in California, says the federal government. Kalasho will also pay $8.5 million in restitution to California.

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Comments

HonestGovernment April 8, 2013 @ 1:03 p.m.

Guess this will put a dent in the donations he always makes to the NRCC and Duncan Hunter. And to selling alcohol to minors.

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Don Bauder April 8, 2013 @ 2:34 p.m.

HonestGovernment: Yes, it's likely those donations won't be flowing for awhile. Best, Don Bauder

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Visduh April 8, 2013 @ 5:24 p.m.

A couple questions: Eastern District of California? Where is that? And if he is from El Cajon, why wasn't he prosecuted by our local US Atty? Then there's the matter of what these excise taxes involved. You report that it involved his "non-cigarette sales", and I know of nothing else that would involve excise taxes, except for other tobacco products. But aren't cigarette sales the biggest factor in taxation of tobacco? This sounds to me as if it was all about evading cigarette taxes, which are now huge. Can you clarify, Don?

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Don Bauder April 8, 2013 @ 9:33 p.m.

Visduh: Eastern District of California is in Sacramento. It's not clear why he was prosecuted there, but U.S. Attorney's offices sometimes prosecute people from other jurisdictions. Kalasho evaded taxes on tobacco products. The non-cigarette products were called "other tobacco products." He said 95% to 100% of those non-cigarette or "other tobacco products" were exported to other states, but actually more than half were sold in California. Thus, he was evading excise taxes. Best, Don Bauder

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MURPHYJUNK April 9, 2013 @ 7:50 a.m.

I wonder if Salam Kalasho brought is business model with him from another country ?

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Don Bauder April 9, 2013 @ 8:10 a.m.

Murphyjunk: I don't know the answer to that. Best, Don Bauder

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HonestGovernment April 9, 2013 @ 8:53 a.m.

"The schemes charged in the indictments involve the distribution of tobacco products other than cigarettes, such as cigars, chewing tobacco, and leaf tobacco, known as OTP (other tobacco products)" "California law requires that when an OTP distributor sells untaxed product to an OTP wholesaler for sale in California, the distributor is required to collect excise tax from the wholesaler and remit it to the BOE on a monthly basis"...The indictments allege that certain distributors and wholesalers conspired to evade excise taxes by various means, including off-books sales of tobacco products to dummy corporations, cash sales, and the use of false invoices." link text

"Two types of excise taxes are collected on cigarette and tobacco products distributed in California: (1) the cigarette tax and (2) the cigarette and tobacco products surtax...

Cigarettes are subject to both the cigarette tax and the cigarette and tobacco products surtax. The tax and surtax are paid by distributors through the use of tax stamps, which are purchased from the Board of Equalization (BOE) and affixed to each package of cigarettes before distribution. The cost of the stamp includes both the cigarette tax and the surtax. Currently, each stamp costs 87 cents per pack of 20 cigarettes, comprising 12 cents for the cigarette tax and 75 cents for the combined surtax.

[Other]Tobacco products, not including cigarettes, are subject only to the cigarette and tobacco products surtax. Tobacco products include all forms of cigars, smoking tobacco, chewing tobacco, and snuff, as well as other products containing at least 50 percent tobacco. Effective July 1, 2011, through June 30, 2012, the rate is 31.73 percent." link text

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Don Bauder April 9, 2013 @ 10:38 a.m.

HonestGovernment: I approve of taxes on tobacco and alcohol, although I admit I neither smoke nor drink, so that point of view may sound selfish. I think taxes on gambling (particularly lottery) winning could be even higher, but, again, I don't gamble. Taxes on socially harmful products and services are positive. Best, Don Bauder

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HonestGovernment April 9, 2013 @ 3:16 p.m.

I also approve. When I did smoke, a long time ago, I rolled my own. Much cheaper, as you can see by the tax/surtax tally. Never went anywhere w/o my can of Bugler and rolling papers. Classy!

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HonestGovernment April 9, 2013 @ 9:59 a.m.

MurphyJ: I'd say the only business model the Chaldean American store owners emulate is the Bush-Cheney-Rumsfeld post-Sadam model. You remember...suitcases of American $100 bills vanishing, by the billions...? Most quick-stops and independent groceries in Cal are owned by the Chaldeans, astute business operators. They donate almost exclusively to the Republican party and lobby hard to elect Repubs and pass Repub legislation. I can only hope that at least one DOJ agent executing a warrant or indictment said to an outraged indictee, "Stuff happens!"

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Don Bauder April 9, 2013 @ 10:40 a.m.

HonestGovernment: This is a subject that everybody seems to know about, but is seldom written about. Maybe it should be. Best, Don Bauder

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