Summary

On February 27, Aaron Misulovin, who had returned to the US after nearly 13 years as a fugitive, pled guilty in U.S. District Court, Camden, NJ, to charges related to motor fuel excise tax, which included one count of conspiracy, three counts of wire fraud, three counts of money laundering, and three counts of tax evasion. His sentencing is scheduled for June 19, 2009. Mr. Misulovin, along with 24 other defendants, were indicted in 1995 on charges related to evasion of approximately $138 million in Federal and New Jersey state motor fuel excise taxes. The indictment charged Mr. Misulovin and others with wire fraud, money laundering, and tax evasion. Federal motor fuel excise taxes provide revenue for the Highway Trust Fund.

Mr. Misulovin operated Kings Motor Oils (Kings), a wholesale fuel distributorship. According to the indictment, Kings purchased hundreds of millions of gallons of tax–free home heating oil, but through an elaborate scheme the fuel was re–sold by a wholesaler as diesel fuel for highway use, with Federal and state taxes being charged and collected from unknowing customers. Instead of remitting payment to the IRS and the state, the taxes were distributed among Misulovin and other conspirators. Mr. Misulovin and the other tax evaders insulated themselves by creating “shell companies” and made it appear as though these sham entities bought and sold the fuel. In reality, these companies never took title or possession of the fuel and Mr. Misulovin created false invoices and other documents to disguise the transactions between wholesale fuel distributorship and fuel wholesaler. This investigation was worked jointly with the Internal Revenue Service–Criminal Investigation Division, the Federal Bureau of Investigation, and the New Jersey Division of Taxation.