Kentucky Man pleads guilty to unlawful distribution
of cigarettes and making false monthly tobacco
and money laundering Charges
OXFORD, Miss. – William C. Martin, Acting United States Attorney for the Northern District of Mississippi, Daniel McMullen, Special Agent in Charge, Federal Bureau of Investigation (FBI), and Phillip M. Durham, Special Agent in Charge of the New Orleans Field Division, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), announce that:
Charles H. Wells, 60, of Hopkinsville, Kentucky, entered a guilty plea today before United States District Judge W. Allen Pepper, in Greenville, Mississippi. Wells waived indictment and pled guilty to a three-count Information charging him with executing a scheme to defraud the United States, the State of Mississippi, as well as other states, and the National Association of Attorneys General, of millions of dollars of taxes and fees due and owing from the unlawful distribution of cigarettes; making and causing to be made false monthly tobacco reports; and money laundering.
Acting United States Attorney William C. Martin stated: “Charles Wells has pled guilty to participation in a scheme to deprive three states, the National Association of Attorneys General, and the United States of millions of dollars under the Tobacco Litigation Settlement and other taxes. This investigation and prosecution is the product of an outstanding cooperative law enforcement effort by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Mississippi State Auditor, the Marshall County Sheriff’s Office and the Tupelo Police Department. They should be commended for their efforts in curbing such illegal activity.”
Wells faces a maximum possible penalty of not more than 20 years in prison on counts one and three, not more than three years in prison on count two; not more than $250,000 fine on each count; and not more than three years supervised release on each count.
In connection with his guilty plea, Wells has agreed to forfeit to the United States his interests in certain real and personal property. The estimated value of Wells’s property interests being forfeited is in excess of $3 million.
Daniel McMullen, Special Agent in Charge of the Federal Bureau of Investigation in Mississippi stated: “The guilty pleas of Jerry Burke and Randy Benham entered last year, and now the guilty plea of Charles Wells entered today, mark the continued efforts to bring to justice those involved in this tremendously complex scheme to defraud multiple states of tax proceeds from the illegal distribution of cigarettes. This case continues to demonstrate the importance of cooperation between federal and state law enforcement agencies in investigating and prosecuting large scale criminal schemes. Because of the teamwork of the agencies involved in this investigation, these three conspirators have seen their ill-gotten gains go up in smoke.”
Phillip M. Durham, ATF Special Agent in Charge said, “ATF is committed to working with our federal, state and local partners to stop criminal groups that profit from the transportation of contraband cigarettes. In these hard economic times, selling untaxed cigarettes puts our law-abiding merchants at a huge disadvantage. The legal tax revenue collected on tobacco products goes toward improving our schools, our highways and our quality of life. The selling of untaxed cigarettes must be closely watched and dealt with as soon as possible. With federal, state and local entities all working together, we are accomplishing just what we set out to do. This task force looks forward to continuing this investigation, seizing the proceeds of these enterprises and placing the culpable parties behind bars.”
“As this investigation continues to develop, I am very appreciative of the joint effort by the federal and state agencies,” said State Auditor Stacey Pickering. “Working through the United States Attorney’s Office for the Northern District of Mississippi, our special agents have had a tremendous privilege and opportunity to put their skills to work and participate in a very complex, multi-jurisdiction crime scheme on behalf of the taxpayers of Mississippi. Had this particular scheme been successfully executed, it could have caused a substantial loss for Mississippi.”
The investigation of these cases is a joint effort by the FBI, ATF, Mississippi State Auditor’s Office, the Mississippi State Tax Commission, the Marshall County Sheriff’s Office and the Tupelo Police Department. The cases are being prosecuted by Assistant United States Attorneys Chad Lamar and Clay Joyner. The forfeitures are being handled by Assistant United States Attorney Sam Wright.
If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of storm victims, contact the National Center for Disaster Fraud toll free at:
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