Tobacco Facts.

A Cigarette wholesaler from Kentucky was declared guilty in huge federal case related to smuggling of cigarettes worth millions of dollars.

Hopkinsville resident Charles Wells was found guilty in the contraband case, while several other suspects are still under investigation.
Several cigarette makers, among the suspects, represent small tobacco plants in Cynthiana and Russell Springs, which were searched by FBI agents in 2008.

Wells acknowledged that starting from October 2007 and until July 2008 he was involved in a illicit scheme evading from paying taxes on tobacco sold across Kentucky, and contributing to State Tobacco Settlement Fund.

In conformity with court report, Wells and his accomplice, Mississippi resident Jerry Burke, reported to be vending cigarettes in Mississippi, whereas de facto, they were vending them in Kentucky, and thus, they avoided paying $1.6 million in taxes they had to pay to Kentucky, as well as $5 per each carton sold in the state by Master Settlement Agreement.

Avoiding these payments Wells said the cigarettes for a lesser price, boosting sales in his wholesale shop. According to the court document the guilty men earned more than $7 million only in taxes and settlement payments.

Last week federal court based in Greenville declared Wells, 60-years old owner of H&W Wholesale Unit based in Hopkinsville, guilty in tobacco contraband.

Though the date of sentence is not scheduled yet, Wells could be sentenced to nearly 20 years in jail.
According to a news report Charles Wells as well agreed to pass his property valued at over$3 million to the state to compensate the damages.

The case as well involves a cigarette manufacturer from Kentucky, the charges said. The name of the individual or the company was not revealed, but the court document stated the company produced and vended more than 300.000 cartons of cigarettes branded as Berley and Berkley to Wells. The latter products are manufactured by which is based in Russell County.

Tantus Tobacco lawyer G. George Bertram declared no employee of the company was allowed to comment on the issue.
At the same time, the attorney mentioned that when FBI agents sold the seized cigarettes on an auction, Berley or Berkley brands weren’t included in the list of brands offered for sale. Yet Tantus Tobacco and Farmers Tobacco are currently under FBI scrutiny.

Last June the FBI declared in a written statement that its agents had carried out several searches of properties owned by cigarette manufacturers in Kentucky, Mississippi and South Carolina. Mississippi has been the focus of attention of FBI, since it is not a part of Mater Settlement Agreement signed between 46 states and tobacco industry.

The landmark Agreement was signed in 1998 putting an end to numerous lawsuits against tobacco industry, but obliging cigarette makers to restrict advertising and pay for every carton they sell in a particular state.

Minnesota is among 4 states not covered by that Agreement. That permits a cigarette manufacturer to report shipment of its tobacco to Mississippi and thus, evade from the requirement to pay to settlement funds, like it is in the Well’s case.

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