Comptroller Agents Bust Man for Use of Contraband Dyed Fuel

ANNAPOLIS, MD (June 20, 2007) – Agents for Comptroller Peter Franchot, working with Baltimore County Police, yesterday confiscated a fuel oil delivery truck found operating with contraband dyed fuel. In addition to finding illegal fuel in the vehicle’s propulsion tank, agents later learned that an unlicensed company was using the vehicle to transport almost 600 gallons of untaxed fuel.

Under Maryland law, diesel fuel that is dyed red, as agents discovered the suspect’s vehicle to possess, is reserved only for off-highway use on farms, construction sites and for home heating purposes. Some scofflaws attempt to use dyed fuel illegally because it is exempt from the state’s motor fuel tax. Diesel fuel is taxed at 24.25 cents per gallon.

“Those violators who choose to break our fuel laws are cheating Maryland taxpayers out of vital revenue that can be used to improve the transportation system of our state,” said Comptroller Franchot. “My enforcement agents are serious about providing a level playing field for those individuals and businesses that abide by the laws.”

The bust resulted from a routine commercial vehicle inspection conducted by Baltimore County Police south bound on I-95 near Kenwood Avenue. The vehicle pulled in for inspection and officers discovered illegal fuel in the truck’s propulsion tanks. Comptroller’s agents were notified and arrived on the scene to find that the vehicle belonged to Apex Tank Lines of 9701 Apollo Drive, in Largo, Md., an unlicensed fuel seller.

Agents charged the driver, George Mensam, 53, of Montgomery Village with unlawfully operating a motor vehicle on a highway with dyed fuel in the propulsion tank and for selling special fuel without a license. He faces a $1,000 fine and/or one year in prison for the dyed fuel charge and a $1,000 fine and/or up to six months in jail for selling special fuel without a license. Both violations are misdemeanors.

Federal regulations require untaxed diesel fuel to be injected with a red color dye to indicate the fuel’s tax-exempt status and its high sulfur content, which can harm the environment. Except for certain tax-exempt organizations that the IRS allows to use low-sulfur dyed diesel fuel, only clear, low-sulfur diesel fuel is to be used for highway travel.

After confiscation of the vehicle agents sold the cargo of 591 gallons of dyed, low sulfur diesel in accordance with law. So far this fiscal year, enforcement agents have arrested a total of 356 individuals for motor fuel tax violations.

***EDITORS NOTE: Photos are available from the bust

CONTACT: Christine Duray, 410-260-6346 (office), 443-336-0215 (cell)

Comptroller Franchot Announces First in the Nation Vendor Offset Program

Initiative on Track to Bring in Millions of Dollars in Back Taxes

ANNAPOLIS, MD (June 20, 2007) – Comptroller Peter Franchot announced today that his agency’s new partnership with federal government to collect back taxes from scofflaw vendors is on track to collect more than $2 million in the first year. Once the program is fully implemented, the Comptroller anticipates collections to be much higher annually. Maryland is the first state in the nation to participate in the new reciprocal program with the U.S. Department of the Treasury’s Financial Management Service.

“Maryland is leading the way in collecting back taxes,” said Comptroller Franchot. “Given the fiscal challenge we face, it’s critical we use all available resources to get any money owed the state.”

The program, which kicked off on June 11, allows Maryland to intercept federal vendor payments to satisfy state income tax liabilities. In the first week alone, the program brought in $49,870 from 69 vendors for state coffers. The federal government netted more than $42,000 from 38 state vendors.

“Given the program’s successful first week, the initiative is on track to bring in more than $2 million in the first year alone,” said Comptroller Franchot. “When fully implemented, we will bring in millions of dollars of back taxes owed the state of Maryland.”

State officials estimate the total collected to grow as more federal agencies join the program and additional state liabilities are added from the Department of Labor, Licensing and Regulation and Central Collections Unit in the Fall of 2007. More taxes under the purview of the Comptroller’s Office will also be phased in as part of the program this Summer.

In addition to the new federal vendor offset program, the Comptroller’s Office participates in a federal income tax refund intercept program. Through this initiative, federal income tax refunds are intercepted by the agency to satisfy individual state income tax liabilities and vice versa.

So far in this calendar year, Maryland took back more than $19.7 million in back taxes from nearly 27,000 delinquent taxpayers. This represents almost a $1 million increase compared to the same time last year. The average offset in 2007 proved $727.

“The refund offset program we conduct with the federal government is one of the most successful in the nation,” said Comptroller Franchot. “It keeps growing because we’re able to quickly certify more accounts to intercept.”

CONTACT: Christine Duray, 410-260-6346 (office), 443-336-0215 (cell)

Franchot’s Agents Confiscate Contraband Alcohol from Baltimore County Bootlegger

Nearly $175,000 in Illegal Booze Seized in FY 2007

*** EDITOR’S NOTE: PHOTOS OF SEIZED ALCOHOL AVAILABLE

ANNAPOLIS, MD (June 18, 2007) – Agents for Comptroller Peter Franchot today announced the recent confiscation of over 500 bottles of untaxed alcoholic beverages valued at more than $3,000 from an unlicensed Baltimore County man. The bust brings the total amount of illegal alcohol seized to nearly $175,000 for the fiscal year.

“People who blatantly disregard the law will not be tolerated,” said Comptroller Franchot. “My agents will continue to enforce Maryland’s alcohol laws to protect those who operate properly.”

Late on Thursday, agents received a tip about alleged illegal alcohol sales in the area. The tipster alerted officials about a flyer offering untaxed beverages for sale. After contacting the seller, agents, acting in an undercover capacity, met the bootlegger on Friday, at approximately 1:15 p.m., to inspect and possibly purchase the alcohol.

The seller and the Comptroller’s law enforcement officials met at a parking lot in Woodlawn where agents purchased a large quantity of beer that the suspect brought in his vehicle. The seller also produced samples of wine and distilled spirits that he had available for sale at his home. The suspect invited agents to his home to inspect and possibly purchase the other beverages. Upon arrival at the home, agents were shown the additional alcohol and agreed to, and actually purchased, a case of wine before identifying themselves and arresting the individual.

Agents arrested Julius Onyz Uwancz, 52, of Gwynn Oak, Md., at his home and seized 88 bottles of distilled spirits, 204 bottles of wine and 252 bottles of beer. Uwancz faces charges of unlawfully selling alcoholic beverages without the required license, a misdemeanor that carries a fine of $1,000 and/or 2 years in jail; unlawfully possessing and selling untaxed alcoholic beverages, a misdemeanor that carries a fine of $10,000 and imprisonment not to exceed 5 years or both; and unlawfully doing business in the state without the required trader’s license, a misdemeanor carrying a $300 fine and/or 30 days in jail.

So far this fiscal year, enforcement agents have arrested 72 individuals for alcoholic beverage violations and have seized 276 gallons of wine, 205 gallons of distilled spirits and over 5,000 containers of beer, valued at nearly $175,000.

*** EDITOR’S NOTE: PHOTOS OF SEIZED ALCOHOL AVAILABLE

CONTACT: Christine Duray, 410-260-6346 (office), 443-336-0215 (cell)

Wicomico County Business Busted For Illegal Cigarette Sale

Annapolis, MD (June 15, 2007) – Agents for Comptroller Peter Franchot yesterday confiscated over 1300 packs of illegal cigarettes along with almost 2000 packages of Other Tobacco Products (OTP) from a Wicomico County business. At 12:04 p.m., agents executed a search and seizure warrant at PITCO Fuel and Food, located at 834 East Main Street, in Salisbury. Agents found the business selling cigarettes without the required license as well as possessing OTP without registration.

“The Comptroller’s Office does not tolerate illegal operators who break the law and hurt other local, law-abiding businesses,” said Comptroller Franchot. “My agents will continue to enforce Maryland’s tobacco laws to protect those who operate properly.”

The bust resulted from a month-long investigation of the business whose owner/operator had been previously warned to cease the sale of cigarettes and ordered to immediately obtain a cigarette license. Comptroller agents, working undercover, went back to the business and once again purchased cigarettes while the business remained unlicensed. Yesterday’s warrant serving netted 1,310 packs of illegal cigarettes. In addition to cigarettes, agents discovered and confiscated a total of 1,972 packages of OTP for which no invoice or registration could be produced.

The business owner/operator, Teryl Lynn Dryden, 49, of Allen, Md. faces charges of unlawfully selling cigarettes without the required license in addition to doing business without the required trader’s license. The penalty for selling cigarettes without a license is a $1,000 fine and/or 30 days in jail while businesses found operating without a trader’s license are subject to a $300 fine and/or 30 days in jail. Both violations are misdemeanors. Charges involving the OTP products are pending.

So far in fiscal year 2007, the Comptroller’s enforcement agents have charged 62 individuals with tobacco violations and have confiscated a total of 59,086 packs of cigarettes with an estimated value of approximately $238,984.94.

CONTACT: Christine Duray, 410-260-6346 (office), 443-336-0215 (cell)

Comptroller Reunites Coach with WNBA Championship Ring, Couple with Cash

ANNAPOLIS, MD (June 13, 2007) – Comptroller Peter Franchot today returned a WNBA championship ring to a local woman and gave back nearly $1,100 to a Crofton, Md. couple through his agency’s unclaimed property program.

“I’m thrilled to be able to return a personal treasure and some unexpected cash to three Marylanders,” said Comptroller Franchot. “The state is merely the custodian of unclaimed property. Our job is to give it back to its rightful owners.”

At a special ceremony in Baltimore, the Comptroller presented Kelley Gibson, the assistant coach for the UMBC Retrievers women’s basketball team with her lost 2000 WNBA Championship ring. The ring, held in her mother’s safe-deposit box, was turned over to the Comptroller’s Office in late 2006 after the bank’s attempts to contact the owner went unanswered. Gibson’s mother, Marcia Ritchie relocated and neglected to pay the rent on the box.

Banks, utilities, insurance companies and other corporations are required to report to the Comptroller any contents of safe deposit boxes, bank accounts, security deposits, wages and insurance benefits that have been unclaimed after three years. Funds remain the property of the owners or their legitimate heirs and can be claimed anytime.

The agency makes its own attempts to reunite owners with their lost property and cash. Through matching files with state tax records, Internal Revenue Service and state Motor Vehicle Administration data, publishing a list of its most current account holders in newspapers across the state and at outreach at community events, the Comptroller’s office gave back $51 million to 42,000 claimants last year.

Gibson, a 1999 alumna of the University of Maryland’s Lady Terrapins went on to play for the Houston Comets for four years, winning a WNBA Championship her rookie year. She gave the ring to her mother for safe keeping and hadn’t realized it was missing.

“With all the traveling I was doing at the time, I thought it was best kept in a safe deposit box,” Gibson said. “I didn’t realize it was lost until the Comptroller’s Office notified me. I’m happy to get it back.”

The other unclaimed property recipients, Clyde and Betsey Grimm, of Crofton, Md., received a check from Comptroller Franchot for $1083.32, the result of an old escrow account from the sale of a home. Clyde, a retired architect was shocked to see his name in the last newspaper supplement and called the agency to see what he was owed. “I was surprised to see my name in the newspaper,” Clyde Grimm said. “This money was unexpected. Everyone likes a windfall.”

Nearly 14,000 people found lost money in this year’s unclaimed property advertising campaign. The initiative generated about 20,000 calls with 70 percent of callers netting a claim. The agency holds approximately 715,000 accounts dating back to the 1960s worth more than $580 million.

To see if you are owed any unclaimed property, visit the Comptroller’s Web site at www.marylandtaxes.com or call 410-767-1700 from Central Maryland or toll-free at 1-800-782-7383.

“I encourage all Marylanders to check our Web site and find out if we have some lost treasurers for you,” said Comptroller Franchot.

Media Contact Only: Christine Duray, 410-260-6346 (office), 443-336-0215 (cell)

Comptroller Franchot Receives First Ever Distinguished Partnership Award

Annapolis, MD (June 12, 2007) – Maryland Comptroller Peter Franchot was honored as the recipient of the first ever Distinguished Partnership Award from the Baltimore-Washington chapter of the National Association of Securities Professionals (NASP). Citing the Comptroller’s efforts to address issues of importance to the investment community as well to the quality of life of all Marylanders, President Aileen Rappaport presented the award at the chapter’s inaugural awards banquet.

“During his career, Peter Franchot has displayed an outstanding level of fairness and excellence through his public policy,” said Rappaport. “Through whatever legislation he wrote or committee he was on, Peter has worked tirelessly to ensure that everyone is served equally. His record of accomplishment sets a high standard for future recipients of this award for years to come.”

In his role as Comptroller, Franchot serves as vice chair of the Maryland State Retirement and Pension System Board of Trustees and has been an outspoken advocate as a member of the Board of Public Works for expanding opportunities in the state’s Minority Business Enterprise (MBE) program.

“I am truly honored to receive the first ever Distinguished Partnership Award. The National Association of Securities Professionals plays an important role in our community as an invaluable resource and networking tool for up-and-coming professionals in the securities industry,” Franchot said. “As Comptroller, I am committed to promoting a strong investment climate by ensuring that the state upholds its pledge to expand opportunity for minority and women professionals.”

Founded in 1985, The National Association of Securities Professionals is a non-profit association of professionals in the securities industry, which brings together the nation’s minorities and women who have achieved recognition in the industry.

Contact: Joseph Shapiro, 410-260-7305

Comptroller Urges Marylanders to Wave Tax-Free Star Spangled Banners This Flag Day

No Sales Tax Charged On American, Maryland and POW/MIA Flags

ANNAPOLIS, MD (June 8, 2007) – As Flag Day (June 14) approaches, Comptroller Peter Franchot today reminded consumers and businesses that American, Maryland and POW/MIA flags are exempt from Maryland’s 5 percent sales tax. The exemption can be found under the Tax-General Article of the Maryland Code, Section 11-205.

“Patriotism is tax-free and so is the purchase of American, Maryland or POW/MIA flags,” said Comptroller Franchot. “Please remember that sales tax should not be charged on purchases of these flags now or at any other time of the year.”

For more information about Maryland sales tax exemptions, consumers can call the Comptroller’s Taxpayer Service Section at 410-767-1300, in Central Maryland, or 1-800-492-1751, toll-free from elsewhere, Monday through Friday, 8 a.m. – 5 p.m.

Contact: Christine Duray, 410-260-6346 (office), 443-336-0215 (cell)

Franchot’s Agents Bust Repeat Cigarette Smuggler in Prince George’s County

More Than $20,000 in Contraband Seized

ANNAPOLIS, MD (June 4, 2007) – Agents for Comptroller Peter Franchot seized over 5,000 packs of illegal cigarettes, valued at more than $20,000 from a veteran cigarette smuggler yesterday in Prince George’s County.

“Cigarette smuggling hurts Maryland businesses and state coffers,” said Comptroller Franchot. “My agents will continue to go after people who break the law.”

Working with personnel from the Federal Bureau of Alcohol, Tobacco and Firearms’ Richmond office, agents stopped Juan Linn, 41, along I-495 near Pennsylvania Avenue in Forestville at 8:30 p.m. on Sunday. Her 2000 Toyota Sienna van was found with 5,130 packs of cigarettes, all failing to have the Maryland tax stamp affixed. This marks Lin’s second arrest for smuggling in Maryland. Agents arrested her in 2004 after discovering her transporting more than 12,000 packs of contraband cigarettes valued at over $50,000. As a result of Sunday’s bust, she was remanded to the Prince George’s County Detention Center on $10,000 bond. The vehicle was also seized.

Lin was charged with the illegal transportation of untaxed cigarettes, a felony that carries a two year jail sentence, and a potential $25,000 fine, or both. She has also been charged with unlawfully possessing untaxed cigarettes, a misdemeanor that carries a one year jail sentence, $1,000 fine, or both.

Thus far in fiscal year 2007, the Comptroller’s Office has arrested 60 people for tobacco violations, seized 56,937 packs of cigarettes, valued at nearly $230,345.96 representing a tax loss to the state of $38,527.09.

Contact: Christine Duray, 410-260-6346 (office), 443-336-0215 (cell)

Comptroller Franchot Asks for Feedback on Agency’s Web Site

Web Site Users Asked For Opinions on Content and Services Offered

ANNAPOLIS, MD (May 21, 2007) – Comptroller Peter Franchot today launched a public survey for users of his agency’s Web site. The Comptroller is looking for feedback on www.marylandtaxes.com to improve usability.

“My office is very interested in providing the most effective communication possible to both individual and professional taxpayers,” said Comptroller Franchot. “Our Web site is a valuable one-stop shop of Maryland tax information and I want to be sure it is serving the needs of all users.”

The survey, only 13 questions, focuses on the organization of information, along with soliciting ideas for improvements in appearance and services. The survey will be available for users until June 15.

To fill out a survey, visit www.marylandtaxes.com and click on the survey icon.

Contact: Christine Duray, 410-260-6346 (office), 443-336-0215 (cell)

Franchot Celebrates REIT, Safe Cigarette and Smoking Ban Bill Signings

Joins Governor, Legislators in Stopping Corporate Tax Scofflaws, Protecting Consumers

ANNAPOLIS, MD (May 17, 2007) – Comptroller Peter Franchot today joined Governor O’Malley, legislators and advocates in celebrating the signing of three key statewide bills aimed at protecting citizens and saving state tax dollars. During the legislative session, the Comptroller testified in support of each of these bills.

During a ceremony today, Comptroller Franchot applauded Governor O’Malley and the legislative leadership for signing bills aimed at stopping the illegal practices of “captive” Real Estate Investment Trusts (REITs), mandating clean air in restaurants and bars, and banning unsafe cigarettes.

“Marylanders are safer today thanks to the passage of these bills,” said Comptroller Peter Franchot. “We also sent a message to corporate tax scofflaws who plan to cheat our state out of tax dollars that their illegal practices won’t be tolerated.”

Officials signed Senate Bill 945 and House Bill 1257, the Captive Real Estate Investment Trust acts that would outlaw this tax avoidance practice and force companies to include income paid to “captive” REITS in their federal taxable income. Comptroller’s Office officials believe the illegal practice cost the state millions in lost taxes. The bill will compliment action already undertaken by the agency to audit companies using this tax loophole and efforts to collect the taxes owed.

House Bill 785, the Cigarette Fire Safety Performance Standard and Firefighter Protection Act was also signed into law and will prohibit the manufacture or sale of cigarettes in the state unless the cigarettes have been tested for fire safety. The cigarette’s manufacturer has to file a specified certification with the Comptroller’s Office.

Also signed today, the Clean Indoor Air Act of 2007, House Bill 359, will prohibit a person from smoking tobacco products in indoor areas open to the public and indoor places of employment except under specified circumstances, beginning February 1, 2008.

Contact: Joe Shapiro, 410-260-7305