Millions in profits from illegal hookah tobacco sales: ESBU shuts down excise tax evasion scheme in Odesa

 Detectives of the Territorial Office of the Economic Security Bureau of Ukraine in the Odesa region have exposed a group of individuals who organized the illegal sale of hookah tobacco.

The pre-trial investigation established that one of the suspects organized a wholesale procurement scheme, followed by the retail sale of illicitly manufactured hookah tobacco through kiosks and the internet.

He involved two trusted individuals in the criminal activity. The organizer was responsible for finding suppliers and sales channels within Ukraine and managing orders, procurement, transportation, and pricing.

One accomplice was responsible for creating and administering online stores on Instagram and Telegram. Through these platforms, the suspects promoted their range of hookah tobacco and accepted orders from customers.

Another member of the group handled financial settlements with suppliers and kept records of expenses, including rent, utilities, and payments to the participants of the scheme.

For secrecy, the group members used private chats in Telegram and Viber. The hookah tobacco was sold through retail kiosks and by mail.

Additional details regarding the seized goods and the specific quantities of illicit products involved in this case are typically included in official law enforcement reports from the Economic Security Bureau of Ukraine.

During their illegal activities, the suspects generated illicit profits from the sale of excise goods, which they subsequently laundered. To achieve this, one of the suspects opened bank accounts to receive proceeds from the illegal operations. The total amount of laundered funds reached UAH 6.4 million.

During an authorized search of warehouses in Odesa, detectives seized 203 kg of illegally manufactured hookah tobacco, as well as tobacco packages without markings. The seized products do not meet quality standards. To ensure compensation for the damages caused by the criminal activity, property valued at UAH 3.2 million was seized. Additionally, each of the suspects voluntarily transferred UAH 300,000 to the needs of the Armed Forces of Ukraine.

The suspects were served with notices of suspicion under Part 2 of Article 28 (commission of a crime by a group of persons), Part 1 of Article 204 (illegal manufacture, storage, sale, or transportation for sale of excise goods), and Part 1 of Article 209 (legalization (laundering) of proceeds obtained through crime) of the Criminal Code of Ukraine.

The indictment has been sent to court. Procedural oversight is provided by the prosecutors of the Odesa Regional Prosecutor's Office.