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GCN Editor's Note: The case began from an anonymous caller in April who tipped off Mississippi authorities to what has become the largest contraband cigarette seizure in U.S. history. Authorities discovered millions of untaxed cigarettes in a north Mississippi warehouse valued at an estimated $20 million — three times the value of all cigarettes seized by customs officials in the United States last year. In a complex investigation, Mississippi and federal officials tracked down the people involved. The following news release is what came of their case. From: U.S. Attorney News Release Filed
11/25/09 GCN Burke and Benham each waived indictment and plead guilty to three-count Informations charging them 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. United States Attorney Jim M. Greenlee stated: “Jerry Burke and Randy Benham have pled guilty to participation in a scheme to deprive three states, the National Association of Attorneys General, and the United States of over twenty million dollars under the Tobacco Litigation Settlement and other taxes. This investigation and prosecution is the product of an outstanding law enforcement investigative effort. 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 have and continue to conduct an excellent undercover investigation to stop such illegal activity. They should be commended.” Burke and Benham each face 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, Burke has agreed to forfeit to the United States over $1.6M in cash, a 1982 Beech C90 Turbo Prop Airplane, valued at over $700,000, a 2006 Chevrolet Suburban and a 2007 Chevrolet Suburban. Daniel McMullen, Special Agent in Charge of the Federal Bureau of Investigation in Mississippi stated: “The two guilty pleas entered today mark the beginning of the end of a tremendously complex scheme to defraud multiple states of tax proceeds from the illegal distribution of cigarettes. Because of the teamwork of the federal, state and local law enforcement agencies involved in this investigation, Jerry Burke and Randy Benham have seen their ill-gotten gains go up in smoke.” Joseph Riehl, ATF Acting Special Agent in Charge said, “ATF is committed to the enforcement of the Contraband Cigarette Trafficking ACT (CCTA) which was enacted in 1978 and amended in 2006, to support state and local law enforcement efforts to stop criminal groups that profit from the transportation of contraband tobacco. 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 completing this investigation, seizing the proceeds of these enterprises and placing the culpable parties behind bars.” State Auditor Stacey Pickering said: “I appreciate the opportunity by the federal agencies to be involved in this investigation working to prevent any loss to the taxpayers of Mississippi. In the State Auditor’s Office, we are accustomed to partnering with federal agencies to protect Mississippi’s integrity and reputation while also participating in what we understand to be the largest known contraband tobacco seizure in U.S. history.” The charges referenced herein are merely accusations; a defendant in presumed innocent until and unless proven guilty. 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. More Information: Case Details
(Extensive) - .pdf file TOBACCO: Mississippi Officials Make Largest Contraband Cigarette Seizure in U.S. History - publicintegrity.org
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