A convicted contraband cigarette distributor is using a Yonkers company as a shell corporation to avoid paying $1.6 million in cigarette taxes, according to a lawsuit brought by New York City.
The city accused 25 Palisade Avenue LLC, Nabil Alghazali and two family members of fraudulently transferring two properties to avoid paying taxes on cigarettes seized in a 2012 arrest in the Bronx.
“The defendants have repeatedly transferred the subject properties amongst themselves and the LLC at nominal purchase prices substantially below fair market value,” the complaint states, “with the intention of thwarting the city’s enforcement of the outstanding tax warrants.”
Alghazali did not respond to an email asking for his side of the story.
The city’s sheriff’s office seized 1,706 cartons of untaxed cigarettes and 95,713 counterfeit cigarette tax stamps from Alghazali in 2012.
Also in 2012, he was one of ten men indicted by federal prosecutors for conspiring to distribute contraband cigarettes from 2008 to 2011.
“My client was a desperate man earning a very low amount of money,” his attorney, Murray Richman, said at a 2013 plea hearing. He “fell in with others of a similar ilk, and I do believe he will never be a threat or a danger to this court again.”
U.S. District Judge Loretta Preska noted prior arrests that “indicate that he has been dealing in contraband cigarettes for some years now.” But she found that his role in the conspiracy was minimal and that he was cooperating with a Yonkers police investigation. She sentenced him to time served and three years of supervised release.
In the Bronx case, Alghazali pleaded guilty to various tax charges and was assessed more than $1.1 million. New York City filed tax warrants with county clerks in the Bronx and Westchester, and now the debt totals about $1.6 million with interest.
Nabil and family members Helal and Sabah Alghazali, who also are named as defendants in the city’s complaint, live on Prescott Street in Yonkers, and 25 Palisade Avenue LLC is also based there.
Nabil bought the Prescott Street property for $430,000 in 2011, according to the complaint, and he bought a four-floor storefront at 25 Palisade Avenue for $300,000 in 2014.
The Prescott Street property has been traded back and forth four times by family members, for $0 to $10 each time, the complaint states, and is now owed by Sabah.
Nabil sold the Palisade Avenue storefront to Helal for $10, who then sold it to the 25 Palisade Avenue LLC for $10.
In 2016, Nabil and Helal estimated the value of the Prescott Street property at $250,000, in a petition to lower the Yonkers property tax assessment, and in a 2019 petition Nabil said it was worth $289,234. Zillow estimates it is worth $696,600.
“By transferring ownership of the properties to others,” the complaint states, “Nabil Alghazali together with the other defendants have insulated the properties from the city’s enforcement efforts.”
The city is asking the court to set aside the transfers and declare that the properties may be used to enforce the cigarette tax debt.
