A press release from the Crystal Lake Police Department:

1st Round of the Tobacco Compliance Checks 2012/2013

On November 29, 2012 Crystal Lake Police Officers conducted the first round of Tobacco Compliance Checks within the City limits. A total of 40 potential businesses that hold valid tobacco licenses were reviewed and 39 of them were found to be in compliance. One business failed the compliance check and was cited for selling tobacco products to an underage minor. The following business was cited:

• Circle K, 220 E. Virginia Street, Crystal Lake

Operating under a State funded grant, the Illinois Liquor Commission has been the lead agency in developing strategies that reduce illegal tobacco sales to minors. Crystal Lake Police will continue to campaign throughout 2012/2013 in an effort to stop illegal tobacco sales to minors by the implementation and expansion of community-based programs, utilizing retail education, enforcement and public awareness.

The proposed $1 a pack increase in cigarette taxes will make tax evasion twice as profitable.

A press release from the U.S. Attorney’s Officeabout cigarette bootlegging offenses before the tax is increase another $1 a pack:

U.S. INDICTS 10 DEFENDANTS ARRESTED FOR ALLEGEDLY TRAFFICKING MILLIONS OF UNSTAMPED, UNTAXED CIGARETTES IN UNDERCOVER STING

CHICAGO — At an undercover warehouse in suburban Hickory Hills, defendants allegedly brought millions of dollars in cash, firearms, narcotics, and counterfeit cigarette tax stamps to purchase millions of unstamped, untaxed cigarettes from two cooperating individuals working undercover with federal agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Altogether, between March 2010 and March 2012, defendants allegedly paid more than $20 million to buy more than 100 million cigarettes without paying Cook County and State of Illinois taxes.

The investigation resulted in federal charges against more than a dozen defendants, including a veteran Cook County sheriff’s police officer.

Following their arrest on March 13, 2012, 10 of those defendants were formally charged in six indictments that were returned yesterday by a federal grand jury, while other defendants remain charged in complaints that were filed previously.

Patrick Fitzgerald

The indictments were announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Andrew L. Traver, Special Agent-in-Charge of the Chicago Office of ATF; and Thomas M. Jankowski, Acting Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The Illinois Department of Revenue and the Hickory Hills Police Department provided valuable assistance in the investigation.

“The distribution of untaxed cigarettes deprives the state and county of significant revenue and this investigation shows that we will work aggressively to ensure that those who allegedly traffic in contraband cigarettes are prosecuted,” Mr. Traver said.

According to court documents, distributors or wholesalers of cigarettes in Illinois must apply for and receive a license from the Illinois Department of Revenue.

Licensed distributors must also purchase tax stamps from the state and Cook County and affix the stamps to each pack of cigarettes that they sell, evidencing proof that the taxes have been paid.

Beginning in March 2010, two cooperating individuals (CS1 and CS2) sold unstamped cigarettes under the direction of ATF agents, and they recorded their telephone conversations and in-person meetings with their customers.

After October 2010, the vast majority of sales of unstamped cigarettes occurred at an undercover warehouse operated by ATF agents, with hidden cameras capturing audio and video recordings of meetings between CS1 and CS2 and their customers.

Between June 2011 and February, 2012, a pending criminal complaint alleges that

• Lawrence E. Draus, also known as “Eric,” 33, of Peotone, and
• his father, Lawrence A. Draus,, also known as “Larry,” 62, of Lansing, a Sheriff’s Police officer who was assigned to the Special Operations Division, Vice Unit, in Maywood

conspired to commit extortion by obtaining at least $10,000 to protect the cigarette trafficking from the warehouse.

Cigarette smoke pours out of this car.

Lawrence E. Draus, was also charged with purchasing contraband cigarettes.

Both defendants were released on bond and the charges remain pending.

The following six indictments were returned yesterday against a total of 10 defendants, all of whom were released on bond following their arrest in March and will be arraigned on later dates in U.S. District Court:

United States v. Mustafa Mohd Shaikh, 12 CR 166

Mustafa Mohd Shaikh, 47, of Tinley Park, was charged with 17 counts of trafficking contraband cigarettes, two counts of money laundering, and two counts of filing false federal income tax returns in a 21-count indictment.

Between March 2010 and February 2012, Shaikh allegedly conducted at least 66 transactions in which he paid the two cooperating individuals more than $9 million for more than 32 million unstamped cigarettes.

The indictment seek forfeiture of at least $680,000, including $600,000 that was seized when Shaikh was arrested, as well as an additional $37,200 that was seized a day later from two bank accounts and his residence, and two vehicles that were seized, a 2012 Infiniti QX56 and a 2009 Nissan Altima.

One money laundering count alleges that Shaikh attempted to illegally transfer money to Jordan, and the tax counts allege that he under-reported his total income on his 2010 and 2011 income tax returns.

United States v. Zulfiqar Alvi and John James, 12 CR 173

• Zulfiqar Alvi, 62, of Justice, was charged with four counts of trafficking contraband cigarettes and two counts of filing false federal income tax returns, and
• John James, 66, of Bourbonnais, was charged with three counts of trafficking contraband cigarettes and one count of possessing and selling counterfeit tax stamps, in an eight-count indictment.

Alvi allegedly conducted approximately 69 transactions in which he paid the two cooperating individuals more than $4 million for more than 32 million unstamped cigarettes. James allegedly conducted 11 transactions in which he paid approximately $675,000 for more than 6 million unstamped cigarettes. Alvi also allegedly under-reported his total income on his 2010 and 2011 income tax returns.

United States v. Aiman Othman, 12 CR 168

Aiman Othman, 32, of Oak Lawn, was charged with seven counts of trafficking contraband cigarettes, one count of money laundering, two counts of illegally possessing firearms as a previously convicted felon, and one count of dealing firearms without a license in an 11-count indictment. Othman allegedly conducted 44 transactions in which he paid the two cooperating individuals more than $3.4 million and provided 161 firearms in exchange for more than 23.1 million unstamped cigarettes. The indictment seeks forfeiture of approximately 161 firearms that were seized during the investigation and a 2008 Cadillac Escalade.

United States v. Firas el Matari and Ammar el Matari, 12 CR 171

• Firas el Matari, 37, and
• his brother, Ammar el Matari, 33,

both of Tinley Park, were each charged with one count of conspiracy to traffic contraband cigarettes in an 11-count indictment. Firas el Matari was also charged with seven counts of trafficking contraband cigarettes and one count of possessing and selling counterfeit tax stamps, while Ammar el Matari was also charged with six counts of trafficking contraband cigarettes. Together, they allegedly conducted approximately 25 transactions in which they paid more than $3.3 million for more than 23 million unstamped cigarettes.

A DuPage County gas station advertises lower taxes than in Cook County.

United States v. Mohammad al Sakhleh and Mahmoud al Qaisi, 12 CR 170

• Mohammad Al Sakhleh, 27, of Merced, Calif., and
• Mahmoud Al Qaisi, 41, of Justice,

were each charged with one count of conspiracy to traffic contraband cigarettes in a five-count indictment. Al Sakhleh was also charged with one count each of trafficking contraband cigarettes and money laundering, while Al Qaisi was also charged with two counts of trafficking contraband cigarettes. The charges allege that Al Sakhleh obtained contraband cigarettes bearing counterfeit New York and New Jersey tax stamps, and that Al Qaisi would find buyers for the cigarettes. Together, they allegedly purchased approximately 3.6 million cigarettes for more than $450,000. The indictment seeks forfeiture of $100,000 that was seized when they were arrested, as well as an additional $159,000 from Al Sakhleh in alleged money laundering proceeds.

United States v. Victoria Jaber and Chadia Abueid, 12 CR 172

• Victoria Jaber, 30, of Chicago, and
• Chadia Abueid, 32, of Chicago,

were each charged with one count of conspiracy to traffic contraband cigarettes in a 13-count indictment. Jaber was also charged with five counts of trafficking contraband cigarettes, two counts of possessing and selling counterfeit tax stamps, and four counts of distributing cocaine, while Abueid was also charged with four counts of trafficking contraband cigarettes and three counts of possessing and selling counterfeit tax stamps. Together, Jaber and Abueid allegedly conducted 26 transactions in which they paid $291,000 for more than 2.8 million unstamped cigarettes. They also exchanged approximately 100,000 counterfeit tax stamps for contraband cigarettes, which they resold for a profit, the charges allege. Jaber also allegedly distributed a total of approximately 4.9 kilograms of cocaine to one of the cooperating individuals.

The government is being represented by Assistant U.S. Attorneys Sunil R. Harjani, Christopher T. Grohman, and Scott V. Bruner.

The charges in these cases carry the following maximum penalties on each count:

• conspiracy and trafficking contraband cigarettes — five years in prison and a $250,000 fine;
• possessing and selling counterfeit tax stamps — 10 years in prison and a $250,000 fine;
• money laundering — different statutes carry a maximum of either 20 years in prison and a $500,000 fine, or 10 years and a $250,000 fine, and both provide for an alternative fine totaling twice the amount of the funds involved in the transaction;
• filing a false federal income tax return — three years in prison and a $250,000 fine. In addition, a defendant convicted of tax offenses faces mandatory costs of prosecution and remains civilly liable to the Government for any and all back taxes, as well as a potential civil fraud penalty of up to 75 percent of the underpayment plus interest; and
• distribution of cocaine — mandatory minimum of five years and a maximum of 40 years in prison and a maximum fine of $5 million.

If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that indictments and complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

An email from Mike Tryon about the next-to-the-last week in Springfield:

Key legislation was debated and voted on last week in the General Assembly. Here is an update of some of the more noteworthy items:

Bill to Curb use of Special Prosecutors Heads to Governor

After receiving unanimous support in the Illinois House in March, legislation that would put strict guidelines in place for judges who wish to appoint special prosecutors to investigate elected officials gained unanimous Senate support last week.

I was a sponsor of this bill.

House Bill 4797 was filed in response to the excessive bills associated with an investigation of McHenry County States Attorney Lou Bianchi, who was eventually acquitted on all charges.

To date, the taxpayers of McHenry County have had to pay more than $525,000 in special prosecutor costs.

According to the bill, before a judge can appoint a special prosecutor, he/she must first exhaust all efforts to find a state’s attorney from

• another county or
• the Illinois Attorney General to do the work.

If it is determined that a special prosecutor must be hired, the bill includes language that gives county boards a voice in discussions regarding costs and the right to see itemized bills.

House Approves Massive Medicaid Reforms

Historic Medicaid reforms – a key component to fixing the State’s budget crisis, were also approved last week.

While difficult, I supported the reforms.

Without meaningful Medicaid reforms, Illinois’ backlog of unpaid bills would grow to approximately $21 billion by 2017, a level of spending that is simply unsustainable.

The General Assembly’s action to cut nearly $1.6 billion from the State’s $11 billion Medicaid program will go far in helping get Illinois back on solid fiscal ground.

All Kids, the Democrats version of Govenror Jim Edgar's Kids Care which allowed coverage of illegal aliens.

With passage of Senate Bill 2840, an estimated 300,000 individuals are expected to be removed from Illinois’ Medicaid rolls because they

• do not meet income eligibility guidelines,
• are not Illinois residents,
• have died, or
• have aged-out of the All Kids program.

This eligibility verification alone will save taxpayers $350 million.

The bill also provides for a moderate rate reduction for hospitals of 3.5% and exempts Critical Access and Safety Net Hospitals from the reduction.

In addition, Senate Bill 2840 will do the following:

1. Roll back the Blagojevich expansion of Family Care by reducing the eligibility limit for parents to $30,000 for a family of four
2. Impose a $10 co-pay for emergency room visits
3. Require a $3.60 co-pay on all services and a $2 co-pay for generic medications
4. Limit prescription coverage to four prescriptions per month without doctor certification of need or specialty drug/condition exception
5. Eliminate funding for adult chiropractic services

Shortly after the House approval of SB 2840, the Senate also approved the bill. It awaits final action by the Governor.  [For who voted how, see here.  Democrat Jack Franks did not support the bill.]

Cigarette Tax Approved

A $1 a pack of cigarettes tax hike was passed by the Illinois House Friday.

Last week the House also voted to increase the cigarette tax in Illinois. Under current law, the State charges a tax on cigarettes that is equivalent to 98 cents per pack of 20.

Senate Bill 2194 would raise the cigarette tax to $1.98 per pack.

The additional revenue raised by this tax, an estimated $350 million per year, would garner a federal match, bringing in a total of $700 million for the State’s financially stretched Medicaid program.

SB 2194 also contains language intended to create a financial incentive for Illinois hospitals and hospital-affiliated health care facilities to provide charity health care to low-income and underserved Illinois residents.

SB 2194 was approved by the House by a vote of 60-52-0 and awaits action in the Senate.

I voted against this bill because I can not and will not support any additional taxes on the people of Illinois.

The key to getting Illinois’ finances in order involves making difficult decisions; not simply creating more revenue sources.

A video poker machine in Crystal Lake.

Gambling Expansion Approved

With many providers waiting months to be paid by the State, and painful cuts being imposed on Medicaid, many other State programs, and on the State’s own workforce, the House passed legislation this week for a new round of licenses to conduct gambling within a variety of Illinois venues.

Senate Bill 1849, as amended, would direct the State to award five additional licenses to operate riverboat casinos at specified locations throughout Illinois.

The bill would also authorize a Chicago casino and the operation of slot machines at Illinois racetracks.

SB 1849 would raise estimated gaming tax revenue of $200 million a year, with additional one-time revenues through the awarding of the additional gaming licenses.

The bill would also provide funding for many agricultural programs and the State Fairgrounds.

The House passed SB 1849 on Wednesday by a vote of 69-47-2; the bill is currently awaiting a concurrence vote in the Senate.

Governor Pat Quinn has indicated that he does not support the proposal.

I voted against the bill, and while I am not opposed to a MODEST expansion of gambling, I feel strongly that revenues from any expansion need to be earmarked, at least in part, toward a pension stabilization fund.

General Assembly Works Through the Weekend

The General Assembly worked through the weekend and is also in session today. As your Representative, I am committed to staying in Springfield as long as it takes to make the required decisions that will lead us to a balanced budget for fiscal year 2013. I will continue to update you as other important pieces of legislation move through the process.

Remember our Military Today on Memorial Day

Lastly, as you gather with friends and family to celebrate this Memorial Day, please keep in your heart the brave men and women who have served in uniform and given their lives in service to our country. All of these heroes are deserving of our utmost respect today, and every day.

Sincerely,

Michael W. Tryon
State Representative, District 64

If Crystal Lake ever can't find an advertiser, it could post a public service announcement like this "No Smoking" sign.

Public service announcements don’t bring in any revenue to help pay for the four $16,000 monuments, but they would establish that ads could be purchased.
= = = = =

Photoshopping by one Heck of a Guy blogster Allan Showalter.

Crystal Lake Police found Jewel, CVS, Shell and Oak Street Food & Liquor selling cigarettes to minors, according to the press release below:

Crystal Lake Police Conduct Tobacco Sales Compliance Check

On October 14, 2010 Crystal Lake Police Department conducted the first in a series of tobacco sales compliance checks for the fiscal year 2010/2011. Police Officers checked a total of 35 businesses and found 31 businesses to be in compliance. Four businesses failed the compliance check by selling tobacco to the underage volunteer. The following 4 persons sold cigarettes to an underage volunteer during the Tobacco Sales Compliance Checks:

• Slagel, Jennifer K. (f/w/ d.o.b. 7/7/1976 of 103 Pauline Ave., Crystal Lake, IL) was charged with Unlawful Sale of Tobacco Products to a Person Under the Age of Eighteen after she sold cigarettes to an underage volunteer at the CVS Pharmacy, 1305 Randall Road.
• Dev, Sandeep NMI, (m/w d.o.b. 08/25/1986 of 126 E. Wing Street #257, Arlington Heights, IL.) was charged with Unlawful Sale of Tobacco Products to a Person Under the Age of Eighteen after he sold cigarettes to an underage volunteer at the Oak Street Food & Liquor, 256 N. Oak Street.
• Tarczynski, Steven D. (m/w d.o.b 12/02/1986 of 530 S. Annandale Drive, Lake in The Hill’s, IL.) was charged with Unlawful Sale of Tobacco Products to a Person Under the Age of Eighteen after he sold cigarettes to an underage volunteer at the Jewel Osco, 6140 Northwest Hwy.
• Crawford, Richard R. (m/w d.o.b. 08/20/1943 of 1600 Thorneapple Lane, Algonquin, IL) was charged with Unlawful Sale of Tobacco Products to a Person Under the Age of Eighteen after he sold cigarettes to an underage volunteer at the Crystal Lake Shell, 220 E. Virginia Street.

All four are scheduled to appear before the City of Crystal Lake Administrative Law Judge for a hearing on November 12, 2010 @ 8:30 a.m.

The compliance checks are funded through a grant from the Illinois Liquor Control Commission.

Volunteers are instructed not to misrepresent their age and to show their actual Illinois Drivers License if asked for identification.

= = = = =

By adjudicating it themselves, Crystal Lake officials keep all of the net revenue and the people cited do not get a criminal record.

Thirty-seven cigarette sellers in Crystal Lake passed the test, but two prominent ones didn’t.

Jewel-Osco and the gift shop in the Holiday Inn did a “no-no.” They sold to underage volunteers sent in by the Crystal Lake Police Department to test compliance with state law.

The two clerks will not go to criminal court. Instead they will be called in front of Crystal Lake’s administrative court, a device to keep court costs and fines that would otherwise go to county government within city coffers.

The police department’s press release follows:

Crystal Lake Police Conduct Tobacco Sales Compliance Check
On May 25, 2010, the Crystal Lake Police Department conducted
final round in a series of tobacco sales compliance checks. Of the 39 establishments licensed to sell tobacco products in the city, only two businesses failed the compliance check by selling tobacco to the underage volunteer. Arrested were:

• Irena Spanier, 56, 421 Silverstone Drive, Carpentersville, IL, was charged with Unlawful Sale of Tobacco Products to a Person Under the Age of 18, after she sold cigarettes to a volunteer at the Embassy Gifts (Holiday Inn), 800 S. Route 31, Crystal Lake.
• Robin Walters, 18, 1491 Blue Heron Drive, Crystal Lake, IL, was charged with Unlawful Sale of Tobacco Products to a Person Under the Age of 18, after she sold cigarettes to a volunteer at the Jewel Osco, 6140 Northwest Highway, Crystal Lake, IL.

Both are scheduled to appear before the City of Crystal Lake Administrative Law Judge for a hearing on July 9, 2010.

I don’t smoke.

Never have.

But hiking cigarette taxes a buck a pack strikes me as discrimination against a minority portion of the electorate.

Even if it is phased in over two years.

How will Illinois rank with other states once the per pack taxes reaches $1.98?

Take a look.

The only border state that won’t draw new customers is Wisconsin, where the tax is already $2.52 per pack, according to the Tax Foundation.

Below, Jim Tobin, the man who ran as Lt. Gov. when I ran for Governor in 2002 on the Libertarian Party ticket evaluates the effects of the proposal:

Dear Taxpayer,

Once again, the greedy tax-and-spend Springfield politicians are planning to drive business and jobs out of our state, this time with Senate Bill 44. This proposed legislation will raise the state cigarette tax from $0.98 to $1.98 a pack.

On top of this projected $1.98 per pack Illinois cigarette tax, Cook County’s cigarette tax is $2.00 per pack, to which Chicago adds $0.68 per pack and Evanston adds $0.50 per pack. Plus, the federal tax was upped to $1.01 last year. More than 40% of the Illinois population will see cigarette tax rates higher than $5.00 per pack if they pass Senate Bill 44.

High taxes on items such as cigarettes encourage people to shop across state lines where taxes are lower. The passage of Senate Bill 44 would place Illinois at a competitive disadvantage to the surrounding states of Missouri ($0.17/pack), Kentucky ($0.60), Indiana ($0.995), and Iowa ($1.36).
In Chicago, where the 10.25% sales tax rate also applies to cigarettes, one pack will sell for almost $10.00 under this proposed legislation. That kind of tax gouging not only drives economic activity out of Illinois, it invites more illegal black-market activity in—and everyone pays for the increased criminal activity this will bring to the state.

In 2004, Illinois tobacco tax revenues were $760 million, but in 2009 they were only $582 million. That is a decline of $178 million over those five years during which Cook County and Chicago raised their cigarette taxes. Clearly there is no assurance that the tax revenue generated by an increase would meet the projected revenue. In fact, a Reason Foundation study of cigarette tax increases across the US showed that 68% of cigarette tax hikes fail to meet revenue projections.

Because raising state taxes on tobacco actually results in lower tax revenues over time, even non-smokers end up paying more. Non-smokers currently pay $178 million per year to make up for lost revenue from past cigarette tax hikes.

I have sent a letter to every Illinois representative recommending they oppose SB0044 which guarantees a 100% cigarette tax hike. Please help me keep the pressure on by also contacting your state representative. The harm that a tobacco tax increase will cause Illinois is clear: fewer jobs and less business. Illinois needs lower, not higher, taxes!

Thank you,

Jim Tobin, President, National Taxpayers United of Illinois

P.S. If you need help finding your state representative call (217) 782-4141 or (312) 814-6440.

You may also call our office or use the Legislator Lookup function on the ILGA website.

Click to enlarge any image.

With no indoor place left to smoke in Illinois, ever wonder where people smoke.

Coming home from the McHenry County Courthouse, I saw this person with hand extended waiting at a stop light.

He or she was obviously taking advantage of the Illinois General Assembly’s not having banned smoking in one’s car.

The General Assembly is still in session, I would remind folks.

The State Senate passed a medical marijuana bill yesterday. If the House follows suit, I’ll keep my eyes open for a different kind of cigarette.

If you have any bill that you think you want or don’t want passed, now is the time to call your legislators. The state switchboard is 217-782-2000.

The title used to be my wish fulfillment.

When I was 14, my sister, about 12, asked our mother if she could have a puff of her cigarette.

“Sure,” Mom said.

I tried it, too, and started coughing.

That was enough to convince me that I didn’t want to smoke.

At Oberlin College on a slow January, 1964, news day, I made up the Anti-Smoke League to protest the horrible taste of smoke coming out of the college smoke stacks.

It ended up as front page news in the Oberlin Review.

Smoke has bothered me for my entire adult life. I literally walk away from people with a cigarette or a cigar.

For most of my life the smokers reigned supreme. I was in the minority…or so it seemed.

When the elegant Victor Arrigo, from Chicago’s 1st Ward, had lung cancer and pleaded for passage of a no smoking rule on the House floor as his seatmate smoked, I supported the effort, which I believe was led by dentist Bruce Douglas, another Chicago Democrat, but one who was significantly more independent that Arrigo.

I started the “No Smoking” section on the floor of the House of Representatives. We put up American Lung Association signs with tape to mark its boundaries. It was down front near the press box on the Republican side. Virginia Macdonald, Harry Leinenweber, Giddy Dyer, Susan Catania, Bill Maher, Bernie Epton and I were the charter members.

A new state rep., Josephine Oblinger, sat behind us. Every once in a while we would smell smoke. When we looked at her, she tried to hide her cigarette. It was pretty funny.

By the 1990′s the House Rules had been changed to prohibit smoking. (One GOP chain smoker kept the roll call and voted against bills of those who imposed the rule.)

Unfortunately, Speaker Mike Madigan would not enforce the rule in the men’s room, where, of course, the smoking went on, as it did in the back of the chamber on the Republican side.

I convinced Mike to buy a couple of electrostatic air cleaners from a man in Cary that I met at a business expo.

That improved the air quality

I cheered Congressman Dick Durbin on in his fight to ban smoking from airplanes.

When I ran for governor in 2002 as a Libertarian, the Democrats, with the help Republicans had just hiked the cigarette tax astronomically. I thought I saw a political opportunity.

After all, smokers made up, what, 28% of the electorate.

We made up cards to hand out to smokers.

They would take the literature, look at them, agree they had been taken to the cleaners, but…

…they certainly did not desert the parties that had cost them money.

Just in case you are interested in the segments of the electorate we targeted in the campaign for governor, you can find Charlie Wheeler’s Illinois Issues article–the best analysis—here.

And, would I have voted for the bill?

Nope.

Voting with my feet is working just fine.