Smoke Tax Indictments Will Stoke Federal Coffers
What began as a suspicion of illegal sale of cigarettes in the Kansas City area spread as far as upstate New York and has turned into a bonanza of cash for the U.S. Government.
Three and a half million dollars will be forfeit, even before anyone goes to trial.
After indictments naming 18 people were unsealed August 13, the alleged operation unfolded to the public.
Federal attorneys arranged seizure and forfeiture of well over $1 million in cash, an airplane and tractor trailers.
Among those charged, an Independence, Mo. couple and a Kansas lawyer.
The indictment says millions of cigarettes were sold without tax stamps, thus undercutting prices charged by legitimate retailers and cheating states of excise taxes.
Prosecutor Justin Davids says one sale was made with cash carried in a bright orange Home Depot bucket, $400,000 — “that’s sort of what drove the train is people’s greed, in this case. The money was so great they were willing to engage in this scheme.”
The charges say the untaxed cigarettes were sold out of a bogus warehouse in Kansas City controlled by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
One sale described in court documents was for 6.2 million cartons of cigarettes. New York State was owed $4.35 per pack that went unpaid.
Craig and Nicole Sheffler of Independence are alleged to be at the heart of the case, along with their lawyer, Harry Najim of Wichita.
Three defendants are from Canada.
Others charged include Florida businessman Gholamreza Tadaiyon and Gerald E. Barber of Virginia, former president Seneca Cayuga Tobacco Company of Oklahoma that manufactures and distributes its own brands of cigarettes.
Editor's note: a previous version of this story identified Gerald E. Barber as the owner of Seneca Cayuga Tobacco Company.