ALBANY, NEW YORK – A Hogansburg man was sentenced Monday to time served in connection with a scheme to smuggle cut rag tobacco into Canada from the United States.
Carey Terrance Sr., 42, was also ordered to pay a $350,000 fine. Cut rag tobacco is tobacco cut into fine strips and used to make smoking tobacco.
As part of his guilty plea last year, Terrance admitted that from approximately 2013 to 2016, he worked with co-conspirators to acquire cut rag tobacco and smuggle it into Canada, where it was made into 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.
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 Reservation, where it was staged for smuggling into Canada.
Terrance admitted that he laundered $221,860.20 as part of the scheme. He forfeited that amount as part of his sentence.