Date: Dec. 4, 2024 Contact: newsroom@ci.irs.gov Albany, NY — Jeffrey Doctor of Charlotte, North Carolina, and Samuel Baker of Laurinburg, North Carolina, were sentenced today in connection with a scheme to smuggle cut rag tobacco into Canada from the United States. Doctor was sentenced to 14 months in prison and Samuel Baker was sentenced to 30 months in prison. The announcement was made by United States Attorney Carla B. Freedman; Harry Chavis, Acting Executive Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI), New York Field Office; and Erin Keegan, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI). As part of their previously entered guilty pleas, Doctor and Samuel Baker each admitted that from approximately 2013 to 2016, they worked with co-conspirators to acquire cut rag tobacco and smuggle it into Canada, where it was used to make contraband cigarettes. Members of the conspiracy sold the contraband cigarettes, making substantial profits by avoiding taxes and duties, and used some of their profits to buy more cut rag tobacco that they sent into Canada. Cut rag tobacco is tobacco cut into fine strips and used to make smoking tobacco. Funds to purchase the cut rag tobacco were sent from Canada, often through the Northern District of New York, to North Carolina. Once purchased, the cut rag tobacco was delivered to warehouses and buildings in the Northeastern United States, including on the St. Regis Mohawk Akwesasne Reservation, where it was staged for smuggling into Canada. Samuel Baker admitted that he laundered more than $19 million as part of the scheme, and previously agreed to an administrative forfeiture of $738,442 in proceeds from his crime. Samuel Baker was also fined $100,000. Doctor admitted that he obtained more than $503,850.66 in unrecovered proceeds, which he agreed to forfeit as a money judgment. Senior United States District Judge Frederick J. Scullin, Jr. also imposed a 2-year term of post-imprisonment supervised release on each defendant. Edgar M. Baker of Southern Pines, North Carolina, was sentenced today to three years of probation and a $75,000 fine following his prior guilty plea to misprision of a felony, for failing to report the conspiracy to authorities once he learned about it. Carey Terrance, another co-conspirator involved in the same scheme, was previously sentenced to time served and to pay a $350,000 fine. IRS-CI and HSI, along with the Canadian Border Services Agency and the Sûreté du Québec, investigated this case. Assistant U.S. Attorneys Allen J. Vickey and Alexander P. Wentworth-Ping prosecuted this case. IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
