Houston men plead guilty to fuel tax fraud
May 2, 2008 11:37 AM
Three Houston TX men have pleaded guilty to one count of conspiracy in connection with a fraud scheme to avoid paying federal fuel excises taxes, according to information from the Office of the Inspector General (OIG) of the Department of Transportation.
Sidney B Baldon II, Tracy D Diamond, and Yousef I Abuteir pleaded guilty in US District Court in Houston.
Baldon owned and operated Mid–Coast International (MCI), a distributor of kerosene and other fuel products in Houston; Diamond was an officer of MCI; and Abuteir purchased products from MCI for resale to Houston–area retail outlets, according to the OIG information.
The three men were charged with conspiracy and tax evasion in a July 2007 indictment, which alleged that the men avoided paying federal fuel excise tax by falsely representing to a Louisiana refinery that the fuel products purchased were for export to Mexico. The fuel products were actually transported to locations in the Houston and Channelview TX areas where they were mixed with other petroleum–based materials and sold at retail fuel stations as taxable motor fuel, according to the OIG information.
The misrepresentation of the fuel purchases for export allowed the men to avoid approximately $2.6 million in federal fuel excise taxes on the $10.7 million of fuel they purchased from the Louisiana refinery from July 2002 to November 2003. The three men also face state charges for importing motor fuels without the required permits, according to the OIG information.
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