The Shuster Project

Tobacco Industry Fraud & False Claims Issues

Click HERE To Read Our Letter Sent to Senator Kerry's Presidential Campaign

Re: An Introduction To NON-health Related Issues of Tobacco Industry Fraud & False Claims Including,  But Not Limited To, Federal Income Tax Fraud,  State Income Tax Fraud, State Sales Tax Fraud & Various Tobacco Industry Antitrust Violations.

 Dear Amy,

In way of a brief, yet specific, introduction...I have 17+ years of experience within the tobacco industry having been employed by the former American Tobacco Company between 1974 and 1991 as a field marketing representative.

During that time, I was witness to an incredible array of tobacco industry fraud and false claims policies, practices and procedures that defraud the states and federal governments of tens of Billions of dollars in various tax revenue categories, income stream categories and antitrust violations primarily against low store cigarette carton volume sales and/or minority owned retail and wholesale outlets that inventory and/or sell cigarettes and tobacco products including, but not limited to, the practice of REDLINING.

In August of 1994, one of the lawyers on our team had been in contact with Stephen D. Altman, Assistant Director, Commercial Litigation Branch, Civil Division regarding just one of dozens of tobacco industry Fraud & False Claims issues The Shuster Project is involved with, in terms of our ongoing Public Presentation Program in making these fraudulent practices known to the General Public, the Income Tax Fraud issue.

Stephen recommended that we considered utilizing the qui tam provisions of the False Claims Act, 31 U.S.C. SS 3729-3730.

While compiling the materials for such an action as we also continue building The Shuster Project's database resources, another lawyer on our team, who was once a prosecuting attorney with the IRS for several years, arranged a meeting with a Special Agent of the IRS at his offices here in Connecticut which took place in late 1997, early 1998.

The result of that meeting, as we were led to believe, was an expedited process of reporting this Income Tax Fraud directly to the IRS via their infamous Form 211.

We filed 7 of them...one for each of the tobacco companies.

Which is what now brings me to you.

The Special Agent for the IRS acknowledged many things at the CT meeting:

1.) that the tobacco industry Income Tax Fraud information we were providing the IRS was, indeed, "new" information for them. He acknowledged that they had never known about this particular Income Tax Fraud, which occurred going back over four and a half decades and continues to this day, nor the tobacco industry document we provided which clearly lays out the mechanism of and for this Fraud quite clearly. The document also makes the tracing of this specific, tobacco company fraud easy to do. He also acknowledged that no existing "public" or "private" documents ever revealed to the IRS the tobacco industry Income Tax Fraud that the one document we provided them did.

2.) that there was or is no investigation(s) into tobacco company Income Tax Fraud due to the fact that the IRS had no idea it was being conducted until the day the Special Agent of the IRS, myself and my lawyer all sat down together and we provided this information and the specific tobacco company document revealing this fraud to the IRS via this Special Agent.

3.) this Special Agent of the IRS acknowledged that the dollar amount of the Income Tax Fraud involved here, considering there are tens of thousands of tobacco company field employees, past and present, who were and are involved in this tobacco industry Income Tax Fraud scheme at various levels of income going back 50 years and more...and with the various political subdivisions that will be getting involved with their own specific interest and penalties protocols, the amounts could very well peak at between $600 -$800 Million Dollars or more - this being just ONE of dozens of examples of tobacco industry Fraud & False Claims issues.

If you go to: http://rxshuster.org/federal.htm  in The Shuster Project web site, this whole IRS "saga" is still being played out.

That page, incidentally, makes reference to $100 Million Dollars as the "high mark" of the Income Tax Fraud.

We continue to maintain consistently "low" or "conservative" figures in our belief that a factual presentation of our data is a responsible approach in our ongoing public presentations as opposed to "sensationalistic" pronouncements.

As I am not aware of the exact formulas the various political subdivisions will utilize in assessing the multiple penalties involved here, I can only offer the actual dollars being defrauded at the point of origin.

I am making these presentations to you with two specific goals in mind.

First, that you might consider making The Shuster Project web site known to your membership and visitors in an ongoing manner if, upon your review of it's content (keeping in mind we add to it every 8-10 weeks) you feel that by learning the unique, NON-health related tobacco industry fraud & false claims issues we teach and illustrate, that the participation of your members including their use of our interactive tools (http://rxshuster.org/survey.htm) provided to empower them to actually make a difference against tobacco industry fraud & false claims, is something you'd like to put at their disposal for them to choose to participate in.

Secondly, that you review the issues of tobacco industry Income Tax Fraud, state Income Tax Fraud, State Sales Tax Fraud (admittedly, we have withheld much in that area as we are determined to see the appropriate government agencies act, utilize our information and begin prosecuting the issues we have empowered them to first, before we just add more good and potent content without seeing the previous content handled responsibly and to it's logical conclusion, which has NOT happened with the IRS) to see if you would like to partner with us and sidestep these inexplicable and invalid excuses the IRS presents for not recovering hundreds of Millions of dollars in indisputably defrauded tobacco industry Income Tax Fraud and that you consider filing qui tam actions together with us.

I can supply you with the tobacco company document (http://rxshuster.org/contigen.htm) that establishes the Income Tax Fraud, that traces it by individual "units", and I can "translate" the document's relevance to tobacco industry Income Tax Fraud, which is what the IRS couldn't have done even if they had knowledge of the forms existence, which they didn't anyway.

Please take some time and review The Shuster Project web site for it's benefits to your members and visitors, but review this letter for consideration of possible partnered filings of qui tam actions which are sorely needed to force the needed "corrections" to the dozens of tobacco industry Fraud & False Claims issues that, astonishingly, the IRS seems to have chosen to suddenly disavow.

As is our custom, this letter will be posted in our CORRESPONDENCE 2000 page for public review and a "hard copy" of this letter will be sent via regular USPS to:

This web site is equipped with the "Get 1 on 1" guest response system.
If I am in my office, you can contact me in "real time."
If I am out of my office you will be prompted to send me an e-mail.
I will get back to you as quickly as I can.