A Mount Pleasant man fronted cash in a multimillion-dollar cigarette trafficking and money laundering scheme that crossed state borders and hid cash within South Carolina businesses, according to federal court documents unsealed last week.
Nasser Alquza, 56, was president of the Central Mosque of Charleston until after his arrest Nov. 30.
Investigators nabbed Alquza and 10 other men in a 26-count indictment filed in North Carolina, accusing them of crimes ranging from conspiracy to receiving stolen property.
Court records say the men bought nearly 7,000 cases of "stolen" cigarettes, each containing 60 cartons, from undercover officers in exchange for about $7.5 million.
Federal agents searched Alquza's home, a three-story yellow house on Oakhurst Drive in the upscale Rivertowne community in Mount Pleasant, shortly after 7 a.m. on Nov. 30. They left with computers, cameras, money, check books, receipts, business records, passports and identification documents.
Officials asked a judge to seal the court records as the investigation continued, but the documents became public last week.
Alquza declined to speak about the case without his lawyer's approval. His Columbia-based attorney, Jack Swerling, said his client would plead not guilty, but declined to comment further.
Imad Musallam, a council member and head of security at the Central Mosque of Charleston, on King Street, said Alquza resigned his position as president.
"That's his personal problem," Musallam said. "We cannot judge someone, and we cannot say anything until he's found guilty."
Musallam said Alquza resigned for personal reasons in December, not because of the investigation.
Tax exempt
Criminal organizations profit off cigarettes by buying them in bulk from states with a low tax, then shipping them to states with a higher tax.
South Carolina charges $5.70 per carton in state tax, for example, while New York City charges $5.75 per pack -- not carton -- in state and city taxes.
Only the Carolinas and North Dakota do not require that wholesalers stamp their cigarettes to indicate that they paid taxes. Criminal rings often buy cigarettes without stamps from wholesalers, then deliver them to states with higher tax rates.
Retailers there slap on counterfeit stamps and sell the cigarettes at a discount. Authorities estimate that state and federal governments lose $5 billion annually to cigarette trafficking.
This is how the federal agents' investigation unfolded, according to unsealed documents:
A Charlotte-Mecklenburg police officer first connected with a man named Khaled Fadel Ibrahim in September 2009 and told Ibrahim he stole cigarettes from trucks in Virginia.
The officer introduced Ibrahim to another undercover officer working for the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, and the two officers later met Kamal Z. Qazah, Alquza's nephew.
The agents told Qazah that they stole cigarettes from Virginia, and Qazah said he could turn a profit of $300 to $600 per case, according to court filings. After developing a relationship with Qazah, the agents asked him about money laundering, court records show.
In April Qazah introduced the officers to his uncle, Alquza, who could launder $100,000 every few months, court records say. Alquza agreed to write the officers checks in exchange for cash, giving himself a 6 percent cut, according to court records.
In the year that followed, Qazah and Alquza laundered $275,000 in money given to them by the undercover officers, and Qazah paid more than $1 million for 810 cases of Marlboros that his uncle helped unload, according to court records.
Alquza wrote checks from a Mount Pleasant Subway store, court records say, and Qazah wrote checks from his 7 Stars Auto Sales in Lugoff. The undercover officers met with the men several times at Alquza's pizza parlor, Milanos, in Columbia.
Investigators wrote in court papers that they believe the two men have spent the past decade involved in illegal activity, including money laundering, interstate transportation of stolen property, marriage fraud, alien smuggling, bank fraud, Social Security fraud, identity theft and operating an unlicensed money service business.
In court filings, authorities described their network as family members helping one another further advance their illegal activity.
Business ties
The indictment against all 11 men recounts alleged illegal cigarette sales at a cell phone store, a storage facility and a convenience store in North Carolina and South Carolina.
Court papers describe a lucrative black market that required special care to ward off any suspicions about the volume of cash.
Over time, the uncle and nephew laid out for undercover officers how they hid money, according to court filings. Here's what those records say:
Alquza and the officers discussed how he previously laundered money from stolen baby formula in Kentucky. He told the officers that he kept overseas accounts in London, Paris and Jordan to handle cash amounts that exceeded $100,000.
Alquza told them that he wired cash back to the U.S., labeling it as revenue from property sales, and only laundered for two or three years so as not to draw attention.
He instructed undercover officers to open a limited liability corporation using just a first name so that he could write a contract between them.
He also told them that he maintains so many businesses so that he doesn't deposit all the cash in one day but instead deposits $5,000 or $6,000 daily.
Qazah offered to launder money for undercover officers through his car lot and two gas stations. He told the officers that he bought cars, returned them within a day and deposited the money into his bank account.
Court records describe months of cash-for-check transactions between the officers and the uncle and nephew, including one occasion in which the officers delivered $125,000 in a toolbox to Alquza's pizza parlor in Columbia.
Authorities wrote in their filings that "Alquza made the statement to the undercover agent that he had been doing this for a while, that he had built 30 businesses, and this is how he covered things up."
Charlotte-Mecklenburg jail records show Alquza listed as an inmate from the day agents searched his home on Nov. 30 through Dec. 5.
The case against all 11 men remains open in federal court in North Carolina.
