$400K Penalty For Nashua Businessman In Tobacco Tax Scheme

CONCORD, NH — A Nashua man who claimed to run the "leading wholesale tobacco company in the USA" was penalized $400,000 after authorities said he failed to pay taxes on his products. Aldean Khater, who operated Khaternet and True Tobacco in the Gate City, pleaded guilty to mail fraud in federal court earlier this month. He agreed to pay $400,000 in partial restitution as part of the plea and the New Hampshire Department of Revenue Administration on Thursday said it collected the sum.

The department said between 2012 and 2017, Khater failed to pay excise taxes on tobacco products he purchased in other states to resell at his stores in New Hampshire and Massachusetts. Khater also worked as a manager at two Mass Cash and Carry locations in Woburn and North Billerica, Massachusetts, authorities said.

Khater then underreported his sales and paid less than $130,000 in taxes — representing a "tiny fraction" of the real amount owed, according to the department. Khater then boasted his Khaternet store was "the leading wholesale tobacco company in the USA" on the store's website, the department said.

"Khater made false claims about his purchasing and selling practices on his website, on invoices to customers, on licensing documents filed with the NH Department of Revenue, and he lied on a number of his tax returns," DRA Commissioner Lindsey Stepp said in a statement. "Schemes of any scale to defraud and deprive the state of New Hampshire and its law abiding citizens of tax revenue will not be tolerated."

Khater faces possible prison time at his sentencing April 18.

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