Indictment Unsealed Alleging Credit Card “Bust Out” Scheme and Trafficking in Contraband Tobacco

59-Count Indictment Includes Conspiracy, Trafficking, Bank Fraud, and Money Laundering

OKLAHOMA CITY—Sanford C. Coats, United States Attorney for the Western District of Oklahoma, announced today the unsealing of an indictment charging three men in a 59 count indictment. KHAWER SAEED GHILL (aka “Sajjan Gill”), 40, residing at times in Midwest City, Mustang, and Edmond, Oklahoma; AHSAN ULLAH (aka “Ibrahim Khan” and “Shawn Ullah”), 41, residing at times in Mustang, Yukon, and Edmond, Oklahoma; and ASMAT ULLAH (aka “Uncle”), 60, a resident of Edmond, Oklahoma, have been charged in an indictment containing 59 counts that includes conspiracy, trafficking, bank fraud, and money laundering involving two primary schemes—a credit card “bust out” scheme and a separate scheme involving trafficking in untaxed cigarettes.

A. Credit Card “Bust-Out” Scheme (Charging Khawer Ghill and Ahsan “Shawn” Ullah)

It is alleged that from March 2003, through April 2007, Ghill and Ahsan Ullah conspired to defraud financial institutions and commercial businesses by obtaining fraudulent loans with no intention to repay the loans. Further, it is alleged that these defendants obtained money and property from various credit card issuers, including banks, credit unions, credit card companies, and retail stores through credit card “bust-out” activity with no intention to repay the banks, credit unions, credit card companies, and retail stores for the cash advances. During the course of this scheme, it is alleged that over 50 separate credit cards were issued and that credit card issuers and banks incurred losses totaling nearly $500,000.

In this scheme, Ghill and Ahsan Ullah are charged with conspiracy to commit bank fraud, bank fraud, and money laundering. If convicted, these two men each face up to 30 years in prison and a $1,000,000 fine.

B. Trafficking in Untaxed Cigarettes (Charging Khawer Ghill, Ahsan “Shawn” Ullah and Asmat “Uncle” Ullah)

In Oklahoma, companies who purchase untaxed tobacco products from tobacco manufacturers are required to be licensed by the State and required to report all sales to the Oklahoma Tax Commission, pay the excise tax, purchase tax stamps and then place a tax stamp on each pack of cigarettes prior to distribution and sale. It is alleged that all three defendants operated a scheme to profit from the sale of contraband cigarettes and smokeless tobacco sold by them without the required excise taxes being assessed and paid to the State of Oklahoma.

According to the indictment, Prime Distributors, LLC (“Prime”), operated as a wholesale convenience distribution company that supplied products, including cigarettes and smokeless tobacco, to convenience stores in Oklahoma. Prime was authorized by the State of Oklahoma to be a stamping agent and was operated by Ahsan “Shawn” Ullah and Asmat “Uncle” Ullah until the fall of 2006 when, the indictment alleges, an audit revealed that Prime was not placing tax stamps on its cigarettes. This allowed the defendants to increase their profits on tobacco sales by avoiding paying state and federal tobacco tax. Prime relinquished its license and could no longer lawfully sell tobacco in the State of Oklahoma.

In the fall of 2006, Ghill and Ahsan Ullah incorporated a new company named Prime Time Distribution, LLC (“Prime Time”), located at the same address, operated by Ahsan Ullah and Asmat Ullah and was authorized by the State of Oklahoma to be a tax stamp licensee. It is alleged the defendants continued to buy and sell contraband tobacco products through Prime Time without the proper stamp on the cigarettes or tax on the smokeless tobacco.

Upon initiating a subsequent investigation, undercover ATF agents met with the defendants. The defendants agreed with the undercover ATF agents to operate a delivery hub in Oklahoma City for possession, sale, and distribution of contraband cigarettes and smokeless tobacco. It is alleged that from February 2007 through July 2009, the defendants sold at least 103,700 cartons (20,740,000 cigarettes) of contraband cigarettes and at least 265,310 of cans of contraband smokeless tobacco.

In this scheme, all three defendants are charged with conspiracy, trafficking in contraband cigarettes and smokeless tobacco, and money laundering. If convicted, all three defendants face up to 20 years in prison and a $500,000 fine.

In addition to the charges above, the indictment seeks forfeiture from each of the defendants in the amount of the proceeds of the crimes that was used for their own personal benefit, to purchase contraband tobacco, and the transfer of money to Pakistan.

Reference is made to the indictment for further information. The public is reminded that the indictment is merely an accusation and that the defendants are presumed innocent unless and until proven guilty.

This case is the result of a joint investigated by the Bureau of Alcohol Tobacco Firearms and Explosives, the United States Secret Service, the Oklahoma City Police Department, the Oklahoma Highway Patrol, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigative Division, United States Postal Service, the Oklahoma Tax Commission, and the Oklahoma Department of Public Safety. This case is being prosecuted by Assistant U.S. Attorneys Susan Dickerson Cox and Robert D. Gifford, II.