SYRACUSE, N.Y. — John Tebbetts, the former owner and operator of Tebb’s Headshops, today pleaded guilty to felony charges related to a five-year scheme to avoid paying New York sales and income tax.
New York State Attorney General Eric Schneiderman and Thomas Mattox, the state’s commissioner of taxation and finance, announced the guilty plea in a news release that Schneiderman’s office distributed today.
Tebbets is the sole owner of headshops in Onondaga, Oneida, Herkimer, Madison, and Jefferson counties, Schneiderman’s office said.
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He admitted that he failed to remit sales tax collected between March 2007 and September 2012 on the sale of herbal incense, pipes, hookahs, body jewelry, dart supplies and other items sold in his stores.
Tebbetts has already admitted to selling dangerous synthetic drugs, known as bath salts, at his stores, Schneiderman’s office said.
“Tebbetts jeopardized the health and well-being of Central New Yorkers by using his head shops to sell bath salts, synthetic drugs that have wreaked havoc on our communities in recent years, and added insult to injury by defrauding taxpayers in the process,” Schneiderman said in the news release.
Tebbetts, 34, of Rome, pleaded guilty in Onondaga County Court to charges of grand larceny in the third degree, a class D felony, for which he faces three to six years in prison, and criminal tax fraud in the fourth degree, a class E felony, for which he faces 1 1/3 to four years in prison.
As part of his plea, Tebbetts also agreed that he owes New York state in excess of $616,000 in unpaid sales tax and personal-income tax, Schneiderman said.
Tebbetts “brazenly pilfered” sales-tax monies from his customers, the state, and the local communities where his stores were located, even after the tax department revoked his authority to collect tax, Mattox said in the same news release.
“In so doing, he deprived those communities of sales tax revenues desperately needed to combat the public safety and health crisis he created with his sale of synthetic drugs,” Mattox said.
Schneiderman’s office in August 2012 filed a lawsuit against Tebb’s Headshops for the sale of bath salts and synthetic drugs in violation of the state’s labeling laws.
In January 2013, a state Supreme Court justice ruled in Schneiderman’s favor, permanently banning Tebb’s from selling any mislabeled, misbranded, or unapproved drugs or intoxicants, according to Schneiderman’s office.
In the midst of those allegations, Tebbetts in December 2012 pleaded guilty in U.S. District Court to numerous federal criminal charges, including possession with intent to distribute a controlled substance.
A judge earlier this month sentenced Tebbetts to 87 months in federal prison on those charges.
A judge will sentence Tebbetts on today’s tax-evasion counts on Aug. 15 in Onondaga County Court, according to Schneiderman’s office.
Contact Reinhardt at ereinhardt@cnybj.com
