Joint Investigation Results in Federal Indictment for Methamphetamine and Fentanyl Trafficking Conspiracy
LOUISVILLE, KY - A Louisville based tobacco wholesaler and retailer was sentenced in U.S. District Court yesterday, by Chief District Judge Joseph H. McKinley, Jr., to 18 months in prison followed by two years of supervised release for his role in a scheme that defrauded the Commonwealth of Kentucky of excise tax returns totaling more than $2 million announced David J. Hale, United States Attorney for the Western District of Kentucky.
Pedro “Peter” Bello, age 43, of Miami, Florida, pleaded guilty to conspiracy to commit wire fraud on May 30, 2013. According to the plea agreement, between April 5, 2007 and December 1, 2009, Bello, a/k/a Peter Bello, d/b/a, GT Northeast of Indiana/Kentucky, conspired with Israel Chavez, both of whom were licensees with the Kentucky Department of Revenue, Excise Tax Division, to deprive Kentucky of excise tax revenues. Chavez was the owner of Chavez, Inc., d/b/a, Cigarettes Direct to You (CD2U). Bello and Chavez, created fraudulent cigarette invoices for the sale of cigarettes to Chavez's business in Louisville, and made the invoices appear as if the cigarettes in question had been sold and shipped from an out of state vendor - specifically, GT Northeast of St. Louis, a business not licensed by Kentucky tax authorities, when, in fact, the cigarettes had been sold by Bello to Chavez, both of whom were license holders and therefore payment of taxes were due at the time the cigarettes were transferred.
Chavez was sentenced on December 13, 2013 to 12 months and one day in prison and agreed to restitution in the amount of $2,090,571.00 to the Kentucky Department of Revenue, from $3,214,035.66 he agreed to forfeit to the United States. Further, Chavez agreed to forfeit 10,842,192 tobacco products and tax stamps valued at $108,000 which were returned to the Kentucky Department of Revenue.
"This ATF investigation included the Kentucky Attorney General's Office of Criminal Investigations, the Louisville Metro Police Department, the U.S. Postal Inspection Service and the U.S. Internal Revenue Service. In addition, coordination with various states’ revenue/regulatory agencies has led to the collection of over $40 million in state excise taxes previously lost due to these illicit operations," stated ATF Special Agent in Charge Stuart Lowrey.
This case is being prosecuted by Assistant United States Attorneys Randy Ream and Amanda Gregory, and the civil forfeiture case was prosecuted by Assistant United States Attorney Amy Sullivan. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the United States Postal Inspection Service.