Kentucky Cigarette Retailer Evaded Paying about $2 Million in Taxes

A cigarette wholesaler being under the observation of federal agents for a decade has been fined in Kentucky for using false invoices in order to avoid paying charges on millions of dollar’s worth of tobacco products that he sold in several US states.

For instance in 2002, prosecutors in Texas secretly tapped the line of a 41-year-old Pedro “Peter” Bello of Miami, Fla. He was involved in several investigations related to untaxed tobacco products, but has never charged until now.

cigarette retailers evaded taxes

Kentucky Cigarette Retailer Evaded Paying about $2 Million in Taxes

Bello was arrested recently on conspiracy charge for wire fraud. According to police officers he bought a great number of cigarettes in Kentucky and used invoices written by a company he owned in Missouri in order to escape from paying sales taxes. Then he sold these cigarettes and gained big profits.

The official accusation against him states that his Louisville-based company eluded to pay about $2 million in taxes on $12 million worth of smokes it sold. But as states a police officer the main aim of his actions was much larger.

The federal government took sever measures against contraband cigarettes sold by people through various people and businesses through illegal ways in order to avoid paying taxes. The Department of Justice declared that the state lose about $5 billion annually in tax revenue from the illegal cigarette sale.

Federal case materials from Kentucky, New York and Texas represent Bello as a man implicated in selling millions of cigarettes all around the country without paying taxes to particular states.

Bello was investigated by Texas officials in 2002. Thousand of people suspected in illegal cigarette sale were secretly listened on cell phones. He avoided formal accusation of crime in a remarkable manner, but 15 others were accused, with 13 people pleading guilty.

For such a crime the law stipulates a punishment from a year to six years behind bars.

The present case against Bello is also related to an ongoing case in Kentucky against Chavez Inc., who sold tobacco products online before federal investigators stopped it 2009.

Bello is often mentioned in search warrants released for Chavez Inc., written by John Black, a representative for the Bureau of Alcohol, Tobacco, Firearms and Explosives. The company is suspected of selling $132 million in smoking products online while evading paying taxes to states and including $2.3 million in excise taxes owned to Kentucky.

Black declared that Chavez shipped untaxed tobacco products to Indiana, Michigan, Montana, New York, New Jersey and Pennsylvania.

Chavez and Bello are both subjected to a civil suit for illegally shipping cigarettes, which then were sold untaxed on the black market. The suit seeks $6.5 million in unpaid taxes from Chavez and its main New York customers.

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