Hogansburg man sentenced for international money laundering conspiracy

Date: Sept. 24, 2024

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Albany, NY - Carey Terrance, Sr. of Hogansburg, New York, was sentenced yesterday to time served and to pay a $350,000 fine in connection with a scheme to smuggle cut rag tobacco into Canada from the United States. Cut rag tobacco is tobacco cut into fine strips and used to make smoking tobacco.

United States Attorney Carla B. Freedman; Thomas Fattorusso, Executive Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI), New York Field Office; Matthew Scarpino, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI), made the announcement.

As part of his previously entered guilty plea, Terrance, Sr. admitted that from approximately 2013 to 2016, he worked with co-conspirators 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.

Funds to purchase the cut rag tobacco were sent from Canada, often through the Northern District of New York, to North Carolina. Once purchased, the cut rag tobacco was delivered to warehouses and buildings in the Northeastern United States, including on the St. Regis Mohawk Akwesasne Reservation, where it was staged for smuggling into Canada. Terrance admitted that he laundered $221,860.20 as part of the scheme; he forfeited that amount as part of sentence in addition to the fine imposed.

Senior United States District Judge Frederick J. Scullin, Jr. also imposed a 2-year term of post-imprisonment supervised release.

IRS-CI and HSI investigated this case, and Assistant U.S. Attorneys Allen J. Vickey and Alexander P. Wentworth-Ping prosecuted this case.

IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.