Michael Kent Klee pleaded guilty last year in U.S. District Court and admitted using businesses in Mississippi and Kentucky as part of the scheme to avoid paying taxes on the cigarettes sold over the Internet.
Court records say he bought thousands of cartoons of unstamped cigarettes from manufacturers in Kentucky and sold them to the Seneca Indian Reservation in Salamanca, N.Y.
Klee has agreed to forfeit up to $1.5 million. He faces up to 23 years in prison and $500,000 in fines.
Sentencing is scheduled to take place in U.S. District Court in Oxford, Miss.