$13.6 Million Settlement Reached in House of Oxford, California Excise Tax Dispute

One of the most prominent names in the distribution of cigars has settled a high-profile tax evasion case with the U.S. government. The Department of Justice (DOJ) has announced that New Jersey-based House of Oxford Distributors Inc. and its officers will forfeit more than $13.6 million worth of cash, property, jewelry, artwork and luxury automobiles as part of a settlement regarding allegations of tax evasion in California.

The DOJ and the Bureau of Alcohol, Tobacco and Firearms and Explosives (ATF) claim that House of Oxford falsified billing statements to show that products that went to California actually went to other states, shipped to states close to California knowing product was going to cross the border without taxes being paid and shipped to addresses in California that were not licensed to received tobacco.

All this was in an effort to allegedly avoid California’s excise tax on other tobacco products, which currently stands at 28.95 percent.

“Today’s forfeiture is the latest result of the collaborative effort of federal and state investigators and prosecutors into systematic tax evasion in the distribution of tobacco products in California,” said United States Attorney Benjamin B. Wagner. “We have obtained criminal convictions of 23 persons in this effort. The $13.6 million forfeiture announced today, one of the largest civil forfeitures ever in this district, serves as a further warning to anyone who would be tempted to defraud the State of California.”

The allegations date back to an untaxed tobacco sale in 2006 and run all the way through 2010. In August 2010, it was announced that House of Oxford would be merging with Harold Levinson Associates, House of Oxford is no longer actively in business today.

News first surfaced last July when it was reported that the ATF seized a variety of assets from Alex Goldman, who previously served as the head of House of Oxford, and now serves as the president of Royal Gold Cigars. In April, another report further detailed the allegations and also indicated that $5 million had been seized, money collected regarding a loan between House of Oxford and Drew Estate. That report also claimed a settlement had been reached. It was not until today that the DOJ formally announced the forfeiture.

In an email to halfwheel, Goldman reiterated a statement he made in April. “This is a civil settlement by a company I was formerly an officer of to settle a civil matter and I am happy to put it behind me. It has no relation to any other company or products I am currently associated with.”

There has been no announcement as to the names or details regarding the convictions mentioned by Wagner.

Patrick Lagreid contributed to this report.

Charlie Minato

I am an editor and co-founder of halfwheel.com/Rueda Media, LLC. I previously co-founded and published TheCigarFeed, one of the two predecessors of halfwheel. I have written about the cigar industry for more than a decade, covering everything from product launches to regulation to M&A. In addition, I handle a lot of the behind-the-scenes stuff here at halfwheel. I enjoy playing tennis, watching boxing, falling asleep to the Le Mans 24, wearing sweatshirts year-round and eating gyros. echte liebe.