A Russell County company that manufactures cigarettes has entered a guilty plea to conspiring to traffic in contraband cigarettes, according to a press release issued by U.S. Attorney David J. Hale.
Tantus Tobacco, LLC pleaded guilty and agreed to pay $750,000 in restitution and forfeitures, during a proceeding held Tuesday, April 1 in federal court. They will pay restitution in the amount of $200,000 to the Kentucky Revenue Cabinet in lost taxes and $60,000 to the Kentucky Attorney General’s Office for assistance in the investigation.
Tantus Tobacco, LLC will forfeit $490,000 to the United States.
As part of the deal, criminal charges will be dropped against company executive David Brian Cooper and Attorney George Bertram, who were initially charged with the company, according to an article published last week in the Lexington Herald-Leader.
A statement issued through the U.S. Attorney’s Office last week indicated that Tantus Tobacco, acting by and through its officers and aided and abetted by Jerry Burke and Charles Wells, pled guilty to making false material statements in reports required to be made to governmental tobacco regulatory divisions of the United States and the state of Mississippi between October 2007 and July 2008.
According to the plea agreement, from at least January 2008 to May 2008, Tantus Tobacco manufactured Berley and Berkley brand cigarettes, which they sold to Charles Wells, a cigarette wholesale distributor in Kentucky. Escrow payments are due on the Berley cigarettes, but not the Berkley.
Wells would obtain the cigarettes directly from the Tantus Tobacco facility located in Russell Springs, Kentucky. However, Tantus Tobacco aided and abetted the creation of false documentation indicating that the cigarettes had been sold to J&B Wholesale (owned and operated by Jerry Burke) in Mississippi, which false documents were submitted to the State of Mississippi.
These false documents allowed Tantus Tobacco to avoid making manufacturer Non-Participating Manufacturer escrow payments on the subject cigarettes and to sell the cigarettes to Wells at a discount. J&B Wholesale, in turn, submitted false and fraudulent Mississippi Tobacco Excise Returns reporting that the cigarettes were received and sold in Mississippi to the State Tax Commission in Mississippi in violation of tobacco sales reporting requirements.
These false Mississippi Tobacco Excise Returns were submitted, in whole or in part, due to the cigarette diversion scheme described above in which Tantus Tobacco was an active participant.
A wholesaler selling cigarettes in Mississippi must file a monthly Tobacco Excise Return with the State Tax Commission showing the number of unstamped cigarettes received that month, plus the cigarettes stamped and available for sale that month, plus the cigarettes sold to licensed wholesalers and exempt persons that month, as well the cigarettes shipped or sold out of state, and the net taxable cigarettes and other pertinent information.
Wells, Burke and a partner of his named Randy Benham pleaded guilty earlier. Wells agreed to forfeit $3 million worth of property.
This case was prosecuted by Assistant United States Attorney Randy Ream and was investigated by the Federal Bureau of Investigation (FBI) Mississippi Division, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Wayne County Lady Cardinal basketball coach Allen Burchett resigned from the position on March 28 after finishing his third season at the helm of the program. Burchett cited the need to spend more time with his family as the reason for his resignation.
With his son and daughter both involved in sports, Burchett said he would like to be able to spend more time with them and attend their games.
“My decision to step down is mainly due to my need to be able to support both my children as they continue in their academic and athletic endeavors. The demand on my time as the head coach severely limited my ability to do that over the past three years, and I felt it wasn’t fair to either of them. The only way I know how to do this job is with 100 percent dedication of my time and effort, and that was taking away from other responsibilities in my life,” said Burchett.
Burchett, a former assistant coach with the Cardinal boys’ program, was named head coach of the Lady Cardinals in December 2011, following the resignation of Coach Tim Pyles. He has also served as coach for the junior varsity boys’ basketball team.
Burchett was 50-39 at the helm of the Lady Cardinals’ program. He led them to a district championship in 2012. They were district runner-up this year and had two regional semifinal finishes during Burchett’s tenure.
“I am very proud of what our teams have accomplished over the past three seasons, not only on the floor but off the floor as well,” said Burchett. “I could not have asked for a better group of girls to work with. They have all set tremendous examples on the court, in the classroom and in the community. I wish them all the best of luck moving forward.”
Superintendent John Dalton expressed his appreciation to Burchett.
Wayne County Athletic Director Rodney Woods expressed regret that the program was losing Burchett, but noted that he understood his reasons for leaving.