Three brothers–two from Burbank and one from Florida–were arrested Wednesday, accused of defrauding Illinois of millions of dollars in taxes on sales of tobacco products, authorities said.
Omar Dahla, 41, and Faride Dahla, 44, both of Burbank, and Samer Dahla, 30, of Lakeland, Fla., were each charged with mail fraud.
The brothers took in more than $10 million in less than two years and, during one period, handled hundreds of thousands of pounds of tobacco products in a few months, investigators alleged. Their operation lasted from at least 2003 until last month, officials said.
The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives seized several trailers of tobacco products from the brothers’ homes and businesses Wednesday, authorities said.
A woman standing outside a Burbank residence that was raided in the 5700 block of West 83rd Place–a neat, one-story, beige-brick house–said the men were falsely charged.
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“They are very, very innocent,” said the woman, who said she is a relative but would not give her name.
She said investigators “would not find anything illegal.”
Omar and Faride Dahla appeared briefly before a federal magistrate judge Wednesday afternoon and were ordered detained until they have a formal bond hearing Friday morning.
The brothers said they understood the charges against them before they were handcuffed and escorted away by ATF agents. Their attorney, Richard Manning, said he will seek their release Friday.
Samer Dahla was in custody in Florida. Prosecutors plan to seek his extradition to Illinois.
ATF officials confiscated the contents of two bank accounts in Florida belonging to the Dahla brothers, one under the name Tobacco Island and another under Main Street Tobacco.
The men are accused of underreporting millions of dollars in sales of chewing tobacco, snuff, pipe tobacco and cigars.
“Diverting legal tobacco products for illegal means is a sophisticated way of amassing large sums of money,” Andrew Traver, special agent-in-charge of ATF in Chicago, said in a written statement.
The complaint against the men states they diverted cash received from the sale of tobacco products at their warehouse to money orders that were sent to a Florida checking count, evading the 18 percent excise tax in Illinois.
Clerks at several area currency exchanges were able to identify the Dahlas as having bought large numbers of money orders, according to the ATF. In April 2005, for example, money orders totaling more than $1.5 million were purchased in the Chicago area and deposited into a Florida account, while only $2,400 in taxable sales were reported to the Illinois Department of Revenue, the ATF alleged.
Investigators said some of the money was used to buy additional tobacco products and some went directly to the Dahla family.
ATF officials said the brothers have been using a warehouse and office space in the 5300 block of West 65th Street in Bedford Park. Their company, called United Brothers Five, has changed names three times since the investigation began in 2001, according to an ATF affidavit.
The brothers also had a location in Lakeland called Tobacco Island, another warehouse and office.
Neighbors in Burbank said they were unaware the Dahlas were involved in the tobacco business, though one resident said she would sometimes see a white, unmarked truck pull up to the house. Residents said the Dahlas are quiet and don’t socialize with others on the block.
Dean Juarez, who lives around the corner from the Dahlas, said he saw ATF agents at the house early Wednesday.
“They were in the garage,” he said. “They were just standing there, talking. This surprises me. It’s quiet over here.”
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