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Two Edmonton men caught with millions of contraband cigarettes they were selling ‘for profit and greed’
A judge has sentenced two Edmonton men caught with more than 2.7 million illegal cigarettes to three years in prison.
Evidence that led to the unstamped smokes — which appeared to be bound for corner stores — was spotted while AE Global Wholesale Ltd., an importer of consumer products from East Africa belonging to Atewebirhan Hab Ghirmu and Esays Teklom Okibmichel, was under surveillance in the fall of 2023 by Alberta’s Tobacco Enforcement Unit.
“Here the magnitude of the fraud is significant,” Justice Lisa Tchir wrote in a recent decision.
“The tax loss to the Alberta government would have been nearly $781,000, including the cigarettes seized incident to arrest. The federal tobacco tax loss was about $452,000. While not particularized as a fraud against the federal government, the total tax loss to taxpayers would have been $1,232,516.13.”
Their wholesale contraband tobacco “scheme was not spontaneous; it required foresight and deliberation,” Tchir said in her June 8 decision.
“It was sophisticated and motivated by greed.”
Their “scheme was reckless as to the degree of harm caused to Albertans or the potential for the harm it could cause to Albertans,” said the judge. “On all accounts there is a high degree of moral blameworthiness.”
The Crown argued the men deserved three years in prison. Their lawyers pressed for house arrest.
“Deterrence and denunciation require a period of incarceration which would adequately deter these accused and others from engaging in wholesale contraband tobacco schemes for profit and greed,” Tchir said.
The court heard officers from the Alberta Gaming Liquor and Cannabis Commission were watching a warehouse operated by the company at 114 Avenue and keeping tabs on Ghirmu on Sept. 26 and 27, 2023.
On the first day, they watched Ghirmu back his vehicle into the warehouse “and then drive to Goody Mart, a convenience store,” said the decision. “There Ghirmu met with an unknown male driving a Dodge Caravan. The men moved between their respective vehicles. A surveillance officer conducted a ‘walk by’ of the Dodge Caravan and noted what appeared to be four ‘master cases’ inside the Dodge Caravan.”
A master case is a cardboard box holding 50 cartons totalling 10,000 cigarettes. They aren’t “marked with the proper labels to indicate that tax was paid on the cigarettes stored inside the box,” said the decision.
On the second day he was being watched, a five-ton truck arrived at the same warehouse.
“The five-ton truck offloaded pallets wrapped in cardboard,” said the decision. “Ghirmu then backed his Lexus into the Warehouse and closed the overhead door.”
Shortly after that, Ghirmu left the warehouse “in a Lexus and parked next to a Mercedes in the parking lot of Triple 1 Convenience,” said the decision. “Three ‘master case’ sized boxes were transferred from the Lexus operated by Ghirmu into the man’s Mercedes.”
When AGLC officers arrested Ghirmu and the Mercedes driver, they found three master cases in the Lexus containing contraband cigarettes, said the decision. “The Mercedes contained four ‘master cases’ of contraband cigarettes.”
After getting a warrant to search the warehouse, investigators found four pallets delivered by the five-ton truck earlier that day, a coil notebook “with references to commonly used abbreviations for common brands of contraband cigarettes,” and Samsung phone on top of one of the pallets. Other pallets lining the walls were covered by blue tarps.
“In total, investigators seized 2,709,018 contraband cigarettes and 35.750 grams of shisha contraband tobacco from the warehouse,” said the decision, which notes none of it was stamped to show the tax had been paid.
A search of the Samsung phone revealed “several instant messenger chats going back several months and continuing until the phone was seized, involving conversations where someone had messaged the phone to arrange for the purchase of contraband tobacco in quantities, descriptions, and values consistent with the sale of wholesale (i.e. multiple ‘master case’) quantities of contraband tobacco,” said the decision.
“In one conversation, Ghirmu responded by indicating the prices for these ‘master cases’ of cigarettes valued in the tens of thousands of dollars,” it said.
“There were many similar conversations on this phone; many included comments that suggested the buyers were associated with convenience stores.”
Texts discussions between Ghirmu and Okibmichel “went back several months and included messages about contraband tobacco, payments from customers, and photos of inventory lists and ledgers,” said the decision. “Some of the discussions involved legitimate products sold by AE Global, while other discussions involved the trafficking of contraband tobacco.”
Both men pleaded guilty in the Alberta Court of Justice to possession of contraband tobacco for the purpose of sale and fraud over $5,000 against the government of Alberta.
Ghirmu, 48, was “born in Eritrea, and experienced poverty, food insecurity, and the impact of regional conflict during the war between Eritrea and Ethiopia.”
He worked as a nurse and then clinic manager until 2006.
“Ghirmu spent some time as a refugee in Sudan, immigrated to Canada and is a Canadian citizen,” said the decision. “Due to a five-year gap in his practice, he was not able to obtain a nursing registration in Canada but worked as a shipping and receiving clerk and as support staff at a group home. When he was subsequently laid off, he shifted his focus to self-employment.”
He’s owned and operated his own convenience store since 2012.
“He also owns the 82 Gift and Smoke Shop and owns half of AE Global which is still in operation and supplies convenience stores and ethnic food stores with East African wares,” said the decision.
Okibmichel, 35, was also born in Eritrea, said the decision. “He moved to Sudan and then Israel and then became a refugee in Canada. He became a Canadian citizen in 2023.”
Since 2019, he’s “owned and operated his own convenience store: 97 Lucky convenience store. He also owns half of AE Global.”
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