ALBANY –– A Hogansburg resident was one of three men arrested last week by federal agents in connection with an alleged international money laundering conspiracy.
Carey Terrance, 39, of Hogansburg; Edgar M. Baker Jr., 46, of Southern Pines, North Carolina; and Jeffrey Doctor, age 48, of Washington, D.C.; were arrested following their indictment on July 23 on one count of conspiracy to commit money laundering, U.S. Attorney Grant C. Jaquith; Kevin Kelly, special agent in charge of the Buffalo Field Office of Homeland Security Investigations (HSI); and Jonathan D. Larsen, special agent in charge, New York Field Office, Internal Revenue Service – Criminal Investigation (IRS-CID) announced Wednesday.
The indictment alleges that, from approximately 2013 to 2016, the defendants worked together and with others to acquire cut rag tobacco and smuggle it into Canada, where it was made into contraband cigarettes. Members of the conspiracy sold the contraband cigarettes, making substantial profits by avoiding taxes and duties, and used some of their profits to buy more cut rag tobacco that they sent into Canada.
The money to purchase the tobacco was sent from Canada, often through the Northern District of New York, to North Carolina. Once purchased, the tobacco was delivered to warehouses and buildings in the Northeastern United States, including on the St. Regis Mohawk Indian Reservation, where it was staged for smuggling into Canada.
Each truckload of cut rag tobacco in the scheme (totaling over 18 million pounds) was worth approximately $3 million in lost tax revenue for the Canadian and Quebecois governments, for a total of $46.8 million, the announcement states.
If convicted, each defendant faces up to 20 years in prison, a fine of up to $500,000 or twice the value of the funds involved in the conspiracy, and a term of supervised release of up to three years.