The Palestinian immigrant and his brother lived next door to each other in homes in West Ocean City, over the years opening a number of businesses throughout the area — three pizza shops, a Mexican restaurant, a liquor store, gas stations, and development companies, court records show.
This week, however, authorities in New York alleged that Basel, 42, and Samir Ramadan, 39, were also at the top of a multimillion-dollar cigarette-smuggling ring and said they believe members of the organization may have funneled some of their proceeds to terrorist groups.
New York Attorney General Eric T. Schneiderman and New York Police Commissioner Raymond W. Kelly said the Ramadan brothers had deposited more than $55 million from their untaxed cigarette sales into small banks in and around Ocean City, making a profit of $10 million along the way.
Only a fraction of the money has been recovered, and the brothers' lifestyles were described by authorities as modest. That, along with alleged links among some of the members of the ring to known terrorists such as Omar Abdel-Rahman, the blind cleric serving a life sentence for a conspiracy to blow up New York City landmarks, raised concerns that the money might be funding militant groups.
"This was not 'Lifestyles of the Rich and Famous,' " Schneiderman said. "We're very concerned about where the money went, and we're still investigating that. We know that criminal rings like this have been used in the past to support terrorist groups and others in other parts of the world."
Maryland Comptroller Peter Franchot said the case highlights that cigarette smuggling is a booming business. His office is working with New York authorities to track down additional Maryland businesses that may have been involved in the ring.
"Cigarette smuggling in the past has always been a mom-and-pop operation, but because it's so lucrative — more lucrative than smuggling heroin — and the penalties are so small, organized crime is moving into it," Franchot said Friday.
New York's attorney general said that one Brooklyn distributor being listened to on a wiretap boasted to Basel Ramadan, "This business is better than selling drugs."
The Maryland brothers were being held without bond in Worcester County, awaiting extradition to New York. Attorneys were not listed, and phone numbers for their various businesses were disconnected.
Each of the 16 defendants faces charges of enterprise corruption, money laundering, and related tax crimes in New York, and if convicted could be sentenced to 25 years in prison.
Raids were carried out along the East Coast on Wednesday. Schneiderman said a yearlong investigation found that the Ramadans formed a distribution chain that involved the purchase of mass quantities of cigarettes from a Virginia wholesaler, where the state tax is 30 cents a pack, that were stashed in a storage facility in Delaware.
Several times a week, a co-conspirator in Brooklyn drove with tens of thousands of dollars in cash, often concealed in garbage bags, to Delaware, where he gave the Ramadans the cash in exchange for cigarettes. Their pipeline "flooded the market" in New York, where cigarette taxes are as high as $5.85 a pack, and Schneiderman said the scheme resulted in a revenue loss for New York State of more than $80 million.
Investigators found $1.4 million in cash in the home and car of Basel Ramadan, along with a .22-caliber handgun.
Basel Ramadan was described by authorities as the "boss of the enterprise," with brother Samir acting as treasurer. Kelly, the New York City police commissioner, did not allege any ties between the brothers and terrorist groups.
The investigation grew, however, out of evidence gathered over the years by the NYPD's intelligence division and was spurred by a report that one of the suspects was dealing in stolen baby formula, a business bankrolled by the blind sheik.
Kelly said another was a confidant of Rashid Baz, who was convicted of shooting up a van full of Hasidic students on the Brooklyn Bridge in 1994, and that a third lived in the same Brooklyn apartment as the secretary of a key Hamas fundraiser and leader.
"This case started because we were being vigilant about terrorism," Kelly said. "Similar schemes have been used in the past to fund terrorist organizations like Hamas and Hezbollah."
Court records show that Samir Ramadan has lived in Ocean City since at least 1995, when he received a ticket for littering on a public street.
According to a 2009 filing in bankruptcy court, Basel Ramadan listed 19 different businesses that he had run, including a restaurant called "Ponch & Lefty," an International House of Pancakes franchise and a construction company. Their companies had names such as "2 Brothers," "Ocean City Cousins," "Tsunami Group," and "S&S of OC."
Many of the businesses listed in the bankruptcy filing appear to have since folded, though he still owned the Village Market in the 1800 block of Philadelphia Ave. through a company called BSM Ocean City Properties. A man who answered the phone there hung up when asked about the smuggling case.Copyright © 2014, The Baltimore Sun