Originally Posted By: NickyEyes1
Can someone explain to me the gas tax scam?


Here's how Raab basically described the "gasoline bootlegging" racket -

A new New York state law in the late 1970's or early 1980's gave the responsibility for paying the taxes to the final wholesaler who actually delivered the fuel to the retail gas chains. They figured this was easier to do instead of collecting them from all the gas stations themselves. The excise and sales taxes amounted to about 30 cents per gallon in the 1980's. The Russians, and later their LCN partners, formed "daisy chains" that supposedly transferred gasoline supplies to one another. There would be a sequence of paper transactions among five or six companies, although no exchanges actually occurred. To escape detection when state or federal authorities came looking for overdue taxes, a dummy or "burn" company was always listed on the transfer records as the one making the final sale to retail stations and collecting the taxes. Of course, the company never existed and was just used to bewilder the tax collectors. The Russians/LCN actually delivered the gasoline but kept the taxes for themselves.


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