By Patsy R. Brumfield/NEMS Daily Journal
ABERDEEN – North Carolina tobacco dealer Calvin Phelps pleaded guilty Thursday to three federal counts in a black-market cigarette scheme.
Phelps is the latest in more than a dozen cases in which Northern District prosecutors have gained convictions on multistate tax evasion and fraud charges that ran through Lee County undercover operations.
He faces up to 43 years in prison, although sentencing will not be set until completion of a U.S. Probation Service report to guide Judge Sharion Aycock’s decision.
Phelps pleaded guilty to schemes to defraud federal and state taxing agencies, money laundering and to lying about his business dealings.
He also agreed to forfeit up to $2 million of his personal money, as well as up to $2 million in proceeds from bankruptcy proceedings of his three tobacco businesses.
Phelps admitted that he worked through a Lee County undercover business known as G-Corp in Guntown to develop a fake paper trail showing he shipped tobacco products out of the U.S. and imported others.
G-Corp was one of two such Lee County businesses taken over by federal agents to conduct the illegal trafficking, which led to arrests and convictions.
Phelps also admitted that his actions were aimed at avoiding payment of federal and state taxes on cigarettes.
Federal charges against him state that, with G-Corp’s help, he claimed to have sold nearly 1 million cartons of cigarettes for $3.19 million to G-Corp to evade nearly $5 million in fees and taxes.
His illegal dealings ran from January 2007 through February 2009, prosecutors said.