Fuel Tax Cheat Gets 5 Years in Fed Prison, $3.3 Million Fine

HOUSTON, TX — As Al Capone can testify, Uncle Sam really doesn't like it when people skip out on their taxes.

Yousef Ishaq Abuteir, 58, learned the hard way that the government wants its cut. From October 2001 to November 2003, Abuteir and two other people were running a grift in Texas and Louisiana.

The trio would buy truck loads of kerosene from Calcasieu Refinery in Lake Charles. To avoid paying the excise taxes the group said that the fuel was for export only, as opposed to being used for things like on-the road trucking.

The kerosene was brought to Houston, where it was blended with middle distillate oil, a by-product of asphalt production.

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The blend was then sold to gas stations throughout Houston as diesel fuel, the gas station owners sold the diesel fuel at regular price and collected the required the taxes from their customers.

In other words, it was basically the classic no-tax cigarette scam only with diesel fuel. Over the two years that the crew ran this racket they sold off more than 13 million gallons of kerosene.

In July 2007, the U.S. Attorney's Office charged Abuteir with conspiracy to evade the federal fuel excise taxes to the tune of about $3.3 million.

He pleaded guilty in April 2008, and was charged and convicted in state court on similar charges. However, before his sentencing date came up on either case, Abuteir fled the country.

Authorities issued a federal arrest warrant in February 2009, followed by an Interpol Red Notice. It wasn't until 2014 that Abuteir was located in Israel. He was subsequently extradited back to the U. S.

When he finally got in front of U.S. District Judge David Hittner, Abuteir was sentenced to 60 months in federal prison and ordered to pay $3.3 million in restitution.