Man Pleads Guilty to Illegal Cigarette Smuggling

September 17, 2013 Updated Sep 17, 2013 at 3:48 PM EDT

By Mitch Simon

...

Man Pleads Guilty to Illegal Cigarette Smuggling

September 17, 2013 Updated Sep 17, 2013 at 3:48 PM EDT

BUFFALO, N.Y. (WKBW) - A Rockville Center man pleaded guilty in a Buffalo courtroom for smuggling cigarettes.

According to attorneys, 62-year-old Joseph Ruda was part of a scheme to ship untaxed cigarettes from New York to Kentucky.

The cigarettes were then mailed to other states without the filing of proper forms with the Commonwealth of Kentucky and the states where the untaxed cigarettes were shipped.

The scheme violated the Jenkins Act which regulates mail-order sales of cigarettes, resulting in the shipment of over 58,000 cartons of untaxed cigarettes to Kentucky.

Ruda also pleaded guilty on behalf of his company, Gutlove and Shirvint, Inc., for using 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 on Long Island.

The cigarettes were then resold in bulk to cigarette bootleggers who then sold them in New York City.

The scheme was developed after Gutlove and Shirvint entered into an agreement with the Phillip Morris Corporation to stop selling cigarettes to the Peace Pipe Smoke Shop, the company's biggest customer at the time.

Phillip Morris determined that Peace Pipe Smoke Shop was allegedly engaged in criminal activity and threatened to stop selling cigarettes to Gutlove and Shirvint if the corporation did not cease doing business with the Peace Pipe Smoke Shop.

Ruda faces six months in prison.

Gutlove and Shirvint, Inc., faces a fine of up to $250,000.

In addition, Ruda and Gutlove and Shirvint, Inc. agreed to forfeit their profits from the scheme, including a $600,000 monetary judgment that both Ruda and his corporation must pay to the Government.

Ruda will also personally forfeit $325,000 to the government, in cash, prior to his sentencing.

He will be sentenced on February 3rd.