Guam whistleblower: $13M tobacco tax unpaid
The government of Guam missed out on $13 million in underreported tobacco tax from just one wholesaler alone over several years, even when the matter was brought to the attention of the Department of Revenue and Taxation in the previous and current administrations by a whistleblower, the whistleblower alleges in a lawsuit filed in federal court on March 27.
The whistleblower, Frank San Agustin, alleged in the lawsuit filed in the District Court of Guam that an unnamed local tobacco wholesaler’s alleged "scheme of tax evasion" caused the alleged underreporting of almost $2.29 million in tobacco taxes a year, or an "unreported and unpaid liability of $13 million" over several years. Cigarette brands such as Wild Horse, Traffic and Ocean are mentioned in the whistleblower lawsuit.
"Upon information and belief, the illegal scheme accounts for roughly 30 percent of all cigarettes the tax evader supplies to retailers in a month," the lawsuit alleges. "Upon information and belief, the tax evader sold or illegally gave away, on average, the equivalent of a 20-foot container of cigarettes each month. As a 20-foot container holds approximately 21,250 cartons of cigarettes, 30 percent of that number, or 6,375 cartons of cigarettes, were not being reported for tax purposes."
There is a $30 tax on every carton of cigarettes, so the untaxed cartons add up in a year to about $2.29 million in underreported tax, the lawsuit alleges. Whistleblower lawsuits in federal court allow for a plaintiff to share a portion of amounts successfully recovered from an alleged tax evasion scheme.
Read more: https://www.postguam.com/news/local/whistleblower-m-tobacco-tax-unpaid/article_c394bb62-512f-11e9-bf8a-ef05692cddc4.html