Independence Business Owner, Wife Sentenced for Contraband Cigarette Trafficking
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Independence, Mo., business owner and his wife were sentenced in federal court today for their roles in a multi-million dollar, multi-state conspiracy to transport hundreds of thousands of cartons of contraband cigarettes from the Kansas City, Mo., area to the state of New York, where they were sold primarily on Indian reservations.
Craig Sheffler, 45, and his wife, Nicole Sheffler, both of Independence, were sentenced in separate appearances before U.S. District Judge Brian C. Wimes. Craig Sheffler was sentenced to five years of probation with six months to be served in a halfway house. Nicole Sheffler was sentenced to three years of probation.
On Dec. 19, 2014, Craig Sheffler pleaded guilty to participating in a conspiracy to commit wire fraud and contraband cigarette trafficking from July 2010 to Jan. 26, 2012. He has forfeited $599,206 to the government from his company, Cheap Tobacco Wholesale in Independence.
Craig Sheffler admitted that he made regular purchases of contraband cigarettes from undercover agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The contraband cigarettes were transported to New York without prior approval by the New York Department of Taxation and Finance and without first paying the required $4.35 per pack excise tax.
Conspirators purchased more than $17 million worth of contraband cigarettes from ATF agents during an undercover operation. Approximately 620,600 cartons of cigarettes – containing 10 packs per carton – were transported to New York without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in the state of New York. The benefit to those smoke shops was that they did not pay New York state cigarette taxes; thus, they could undercut the prices charged by off-reservation cigarette retailers by over $40 per carton. The total state excise tax lost to the state of New York was more than $8 million.
On Feb. 19, 2015, Nicole Sheffler pleaded guilty to her role in the conspiracy. She admitted that she collected and transported the money used to purchase the contraband cigarettes from the ATF undercover operation. Nicole Sheffler collected the money from customers of Cheap Tobacco Wholesale and cashed checks at a check cashing business. She delivered the money to the ATF undercover warehouse in Kansas City, Mo., for the cigarette purchases by Cheap Tobacco Wholesale.
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 Federal Deposit Insurance Corporation – Office of Inspector General and the Kansas City, Mo., Police Department.