By Patsy R. Brumfield/NEMS Daily Journal
OXFORD – Federal prosecutors want nearly $2 million they claim was part of a multi-state scheme to avoid federal cigarette taxes.
Monday, they asked to be granted $1,946,880 in currency converted from two separate business checks from South Carolina.
The forfeiture complaint claims the money came from an alleged scheme by King Mountain Tobacco Co. of Washington state through a confidential informant to a tobacco wholesaler in Georgia.
Cigarette manufacturers are not required to make an extra per-carton payment when they sell their products into a state, like Mississippi or Georgia, which were part of a national tobacco settlement.
The government alleges that this scheme involved “hiding of product” to avoid paying the taxes in South Carolina, which was not part of the national settlement.
The crux of the “diversion scheme,” the government said, involved falsely reporting cigarettes as being received in Mississippi for distribution here, when in reality, they allegedly would be shipped elsewhere to avoid the payment entirely.
Monday’s forfeiture complaint is at least the second against King Mountain.
In April, the U.S. Attorney’s Office in Northern Mississippi asked for forfeit of $919,924 and 23 vintage vehicles.
In a sworn statement by the FBI, the government claims King Mountain shipped cigarettes or claimed to have shipped them into Guntown and then on to non-settlement states.
No indictments are public for anyone associated with King Mountain, although the FBI said it appears KMT had not paid any federal taxes for loads sold to a South Carolina wholesaler.
King Mountain officials could not be contacted for comment, although on April 20 they declined to do so after reports became public that they were under investigation.
Contact Patsy R. Brumfield at (662) 678-1596 or email@example.com.