As announced by U.S Attorney Nick Brown, Tae Young Kim, the final defendant in a scheme to avoid paying tobacco excise taxes to Washington State of $10 million-plus, has been sentenced to 22 months in prison in a United States District Court in Seattle. Kim is aged 45 years, and he hails from Las Vegas in the State of Nevada and owns the company, TK Mac.
The company owned two smoke shops located in Lynnwood and Federal Way, Washington. He evaded paying tobacco excise taxes and falsified statements of his tax returns with Hyung Il Kwon, 48, of Henderson, Nevada. In January 2019, Kim admitted guilt in one count of e-fraud and falsifying tax return statements. Judge James L. Robart, the U.S District Judge, expressed that people should know that evading tax and falsifying tax statements would be punished as it is a crime.
U.S Attorney Nick Brown explained that the tax evasion scheme had been ongoing for years and had robbed the people of millions that would have funded State programs. The use of falsified documents cut the amount of tax they ought to have paid and offered them an unfair competitive advantage against other tobacco retailers. The financial fraud crimes committed are; defrauding the State of tobacco excise taxes and money laundering.
The facts are that between the years 2009 to 2017, the co-conspirators were involved in two schemes to avoid paying tobacco excise taxes to the State. The schemes saw two tribal smoke shops sell tobacco products in large amounts to TK Mac, with most sales paid through cash with TK Mac failing to report these transactions to the State.
Upon reselling the products in cash, TK Mac had large deposits of cash, which would have then triggered the State scrutiny; therefore, he started engaging in a money-laundering scheme. From 2013 until 2017, TK Mac and the two tribal smoke shops engaged in sham transactions. The two tribal shops would write checks to TK Mac as though they had bought tobacco products from it with cash that TK Mac provided to them. TK Mac would receive an excise tax credit from Washington State, yet no tobacco had changed hands, resulting in the State losing above $10 million.
The Aftermath of the Multi-Million Dollar Scheme
Anthony Edwin Paul, the company’s president who possesses the two tribal smoke shops, was sentenced to pay $5,000, restore $1,764,818, and a 14 months prison term in December 2021. Theodore Kai Silva, who was under Paul’s authority and the executor of this scheme on the shops’ behalf, was placed under probation for four years with six months of house arrest and paid in restitution $25,000.
Kwon was in January 2022 sentenced to a prison term of 26 months, a fine of $10,000, and to pay $5,098,249 to the Washington State Department of Revenue as restitution. The government confiscated above $5 million in cash and assets from Hung Il Kwon and Tae Young Kim. The Judge said that Kim should pay $4,339,407 to the State Department of Revenue of Washington as restitution in February 2022.
Photo by Jp Valery