CDTFA removes over $26 million in illicit products from the market in Q3 2026

WHAT YOU NEED TO KNOW: The California Department of Tax and Fee Administration’s investigators and inspectors conducted more than 1,700 operations in the third quarter of 2026. In addition to the removal of illicit cannabis and tobacco products, the Department concluded a long-term investigation into a Riverside County car dealer resulting in a prison sentence and $3 million in court-ordered restitution.

Sacramento — Investigators and inspectors from the California Department of Tax and Fee Administration (CDTFA) in July, August, and September 2026 seized over $26 million worth of illicit cannabis and tobacco products and completed multiple cases involving nearly $6.4 million in court-ordered restitution for a variety of tax crimes.

Among the most notable actions is a sales tax evasion investigation involving a Riverside County car dealership, which resulted in $3 million in court ordered restitution. The business owner pleaded guilty to felony tax evasion and will serve two to four years in prison. Another investigation led to a business being ordered to pay the State nearly $800,000 in restitution after pleading guilty to counterfeiting a trademark, money laundering, and tax evasion.

“The Department saw significant gains in the amount of illicit products removed from store shelves and warehouse inventories, in part due to the strategic partnerships we maintain with state departments and local agencies,” said California Department of Tax and Fee Administration Director Trista Gonzalez.

Additional highlights from inspections and investigations CDTFA led or supported include:

• $13.3 million in illicit cannabis and tobacco products recovered from an unlicensed operation in a Los Angeles County warehouse
• $10.2 million in banned flavored tobacco items seized from licensed tobacco retailers, including nicotine vapes, cigarettes, and flavor enhancers
• $2.6 million in illicit cannabis and cannabis products seized from cannabis retailers and tobacco retailers
• $1.7 million in court-ordered restitution from 14 felony sales tax and cannabis excise tax prosecutions
• $1.3 million in court-ordered restitution in a cannabis-related case in partnership with the San Bernardino County District Attorney’s Office
• 100 inter-agency collaborations throughout the state, from Butte and Mendocino counties in the north to Palm Desert and San Diego in the south
• A grand jury indictment issued to an out-of-state tobacco distributor for excise tax evasion. An extraditable arrest warrant has been issued, and bail has been set at $23 million

CDTFA conducts routine inspections to help ensure cigarette and tobacco businesses comply with California laws governing the sale of taxable items while verifying that they document and pay all appropriate taxes. These inspections help protect consumers by removing illegal, unregulated products from the marketplace.

The Department is authorized to use a broad range of collection actions, some of which are outlined in the publication Collection Procedures, to enforce the payment of taxes and fees it administers. These include liens on property, till taps (also known as warrants for collection), keeper warrants, and various other methods.

The California Department of Tax and Fee Administration (CDTFA) administers California’s sales and use, fuel, tobacco, alcohol, and cannabis taxes, as well as other taxes and fees that fund specific state programs. CDTFA-administered programs accounted for more than $97.8 billion in the 2024/25 fiscal year, supporting essential local services such as transportation, public safety and health, libraries, schools, social services, and natural resource management programs through the distribution of tax dollars directly to local communities.