Feds Charge Kansas Tobacco Firm in Fraud Scheme

Source from:  WICHITA, Kan. Associated Press - October 17, 2008 10/20/2008

Federal prosecutors are accusing the owner of a Kansas tobacco wholesaler and his business associates of a scheme to avoid paying taxes on cigarettes. The government alleges in a 43-count indictment unsealed today that the scam cost the state of Oklahoma and Indian tribes $25 million in tax revenue. Sunflower Supply Company president and owner Gary Hall was indicted, along with seven others from Kansas, Missouri and Oklahoma. Prosecutors say the investigation started in 2006 after the Kansas Highway Patrol stopped a vehicle in Coffeyville that was carrying cigarettes worth over $200,000 without appropriate tax stamps. Agents raided Sunflower and Rebel Industries last year. According to the indictment, the defendants defrauded Oklahoma and Indian tribes that share in the revenues from cigarette taxes from January 2005 to May 2007. Kansas and Oklahoma require a tax stamp on each pack of cigarettes representing the appropriate tax for the location in which the cigarettes are sold. Enditem