new york man pleads guilty to trafficking in over $4 million of contraband cigarettes
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a New York man pleaded guilty in federal court today to his role in a conspiracy to traffic in more than $4.1 million worth of contraband cigarettes.
Keith Donald Stoldt, 59, of Cowlesvilel, N.Y., waived his right to a grand jury and pleaded guilty before U.S. Chief District Judge Fernando J. Gaitan to a federal information that charges him with conspiracy to commit wire fraud and contraband cigarette trafficking.
Stoldt and his wife operate the Totem Smoke Shop, located on the Tonawanda Seneca Indian Reservation in Basom, N.Y. By pleading guilty today, Stoldt admitted that he participated in the conspiracy from July 1, 2011 to Jan. 28, 2012.
Stoldt placed orders for more than $4.1 million of unstamped cigarettes (that is, cigarettes that did not carry the mandated tax stamps because the New York excise tax of $4.35 per pack of cigarettes was not paid) from the president of an Oklahoma tobacco company that manufactured and distributed its own brand of cigarettes. (The Oklahoma company is not identified in court documents; the president of the tobacco company is identified only as an unindicted co-conspirator.) This unindicted co-conspirator would then place orders for those unstamped cigarettes from a Florida business (owned and operated by another unidentified, unindicted co-conspirator) who in turn ordered unstamped cigarettes from a cigarette wholesale business in Independence, Mo. (operated by another unidentified, unindicted co-conspirator).
After the orders had been placed, the Florida business owner would pick up the unstamped cigarettes at either the Independence company’s warehouse or another location in the Kansas City, Mo., area and transport them to the Oklahoma tobacco company. From there, the unstamped cigarettes would be transported to a Nebraska tobacco distribution company then transported by a Nebraska transportation logistics company (both under the same Nebraska parent corporation) to the Totem Pole Smoke Shop in New York.
Stoldt knew that the New York state excise tax of $4.35 per pack would not be paid. This allowed Stoldt to sell the unstamped, untaxed cigarettes at his Totem Pole Smoke Shop at a considerable discount and deprived the state of New York of its tax revenue. As a result of this conspiracy, the amount of Stoldt’s forseeable excise tax loss to the state of New York was approximately $4.37 million.
Under the terms of today’s binding plea agreement, Stoldt must forfeit $247,080 to the government, which represents the proceeds of the conspiracy, and must pay restitution. If the court accepts the plea agreement, Stoldt will be sentenced to a term of probation. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys Paul S. Becker and Justin G. Davids. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS-Criminal Investigation, the Kansas City, Mo., Police Department and FDIC-Office of Inspector General.