Jeffrey Doctor, 52, from Charlotte, North Carolina, and Samuel Baker, 46, from Laurinburg, North Carolina, have been sentenced for their involvement in a scheme to smuggle cut rag tobacco into Canada. The announcement was made by United States Attorney Carla B. Freedman; Erin Keegan, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI); and Harry Chavis, Acting Executive Special Agent in Charge of the Internal Revenue Service Criminal Investigation (IRS-CI), New York Field Office.
Doctor received a sentence of 14 months in prison while Baker was sentenced to 30 months. Both men had previously entered guilty pleas admitting their roles in acquiring cut rag tobacco and smuggling it into Canada between 2013 and 2016. The tobacco was used to produce contraband cigarettes sold without paying taxes or duties.
The operation involved funds being sent from Canada through the Northern District of New York to North Carolina to purchase the tobacco. It was then delivered to locations in the Northeastern United States for staging before smuggling into Canada.
Samuel Baker admitted laundering over $19 million as part of this conspiracy and agreed to an administrative forfeiture of $738,442. He was also fined $100,000. Jeffrey Doctor admitted obtaining more than $503,850.66 in unrecovered proceeds which he agreed to forfeit as a money judgment.
Both defendants were also given a two-year term of supervised release following their imprisonment by Senior United States District Judge Frederick J. Scullin Jr.
Edgar M. Baker from Southern Pines, North Carolina received three years probation and a $75,000 fine after pleading guilty to misprision of a felony for failing to report the conspiracy upon learning about it.
Carey Terrance was previously sentenced to time served with a $350,000 fine for his role in the same scheme.
The case was investigated by HSI and IRS-CI along with Canadian authorities including the Canadian Border Services Agency and Sûreté du Québec. It was prosecuted by Assistant U.S. Attorneys Allen J. Vickey and Alexander P. Wentworth-Ping.