Everything for Your Home's
Beauty, Comfort & Convenience 384-2123
704 Jamestown St, Columbia
Dr. Ronald P. Rogers
Support for your body's natural healing capabilities
Click here for details
Columbia Walmart Supercenter
Open 24 Hours
Click here for information
Real Estate & Auction Co.
Duo County Telecom
Now Available Through
Your Cable Service!
GUN & PAWN
What's Going On
Info about the
Janice Holt Giles
and Henry Giles Society
Columbia Gas Dept.
GAS LEAK or GAS SMELL
24 hrs/ 365 days
270-384-2006 or 9-1-1
Call before you dig
Directory of Churches
phone numbers and more
for churches in Adair County
Last defendant in cigarette tax fraud scheme sentenced
The case involved untaxed cigarettes sold in all 50 States and was the first prosecution in the nation under federal PACT Act.
Click on headline for complete story
From U.S. Attorney's office
U.S. Justice Department, Eastern District of Kentucky
(Fri 23 Dec 2016) -The last defendant in a domestic and international, multimillion-dollar cigarette tax fraud scheme has been sentenced.
On Thursday, U.S. District Judge David L. Bunning sentenced Anthony Cosica, 54, of Pinetop, AZ, to 24 months in federal prison. Eight other defendants, including three from eastern Kentucky and two from Russia, have already been sentenced, for charges including conspiracy to commit mail fraud, wire fraud and money laundering and violations of the PACT Act.
This case marks the first prosecution in the nation for violations of the PACT Act, which is a 2010 federal law enacted to prevent trafficking in untaxed cigarettes.
According to court documents and evidence presented at trial, from 2008 to 2013, the defendants devised a scheme that defrauded federal, state and local governments across the country, out of cigarette excise taxes totaling approximately $48 million. Specifically, the defendants operated mail order and internet businesses engaged in the delivery sales of untaxed cigarettes to customers in all 50 states.
"This case represents a milestone in enforcement of the PACT Act," said Kerry B. Harvey, U.S. Attorney for the Eastern District of KentucKY "Mr. Cosica and his co-conspirators devised a complex criminal enterprise of international proportions which cost public treasuries millions of dollars. Congratulations to the law enforcement agencies and our trial team for their superb work in unwinding this criminal scheme."
The leader of the conspiracy, John Maddux Jr., 56, formerly of Russell, KY, operated mail order/online businesses that sold the cigarettes at discount prices. Maddux executed the scheme by forming a business with two Russian nationals, Alexander Sergeev and Mikhail Serov. Sergeev and Serov shipped cigarettes from Russia directly to customers of Maddux and his co-conspirators. Evidence at trial further established that Maddux also fulfilled cigarette orders for other co-conspirators, who were also operating similar mail/online businesses. To get the cigarettes through U.S. Mail, the defendants disguised and marked the cigarettes as gift items, which is a violation of the PACT Act.
Under the PACT Act, businesses are required to register and report cigarette and tobacco sales to state tax administrators, allowing States to properly collect required excise taxes from the businesses. The defendants intentionally avoided these requirements and millions of dollars in taxes during the scheme.
The defendants received the following prison sentences: John Maddux 10 years; Christina Carmen, formerly of Russell, KY, 60 months; David H. White, formerly of Ashland, KY, 24 months; Julie Coscia, of Pinetop, Ariz., 36 months; Michael E. Smith, of Escondido, CA, 42 months; Alexander Sergeev, 46 months; Mikhail Serov, 46 months; and Barbara Routh, of Prospect, KY, two years' probation. Under federal law, all defendants must serve at least 85 percent of their prison sentence.
Domestic and International trafficking in untaxed cigarettes via mail order or the Internet defrauds the federal and state governments of hundreds of millions of dollars in tobacco taxes and frequently funds other criminal activity.
U.S. Attorney Harvey; Stewart Lowrey, Special Agent in Charge, Louisville Field Division, Alcohol Tobacco Firearms and Explosives; Tracey Montano, Special Agent in Charge, Nashville Field Office, Internal Revenue Service-Criminal Investigations; Richard Deer, Acting Special Agent in Charge, Philadelphia Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Mark McCormack, Special Agent in Charge, Metro Washington Field Office, U.S. Food and Drug Administration, jointly announced the sentence.
The investigation was conducted by the Bureau of Alcohol Tobacco Firearms and Explosives, the Internal Revenue Service-Criminal Investigations, the United States Department of Labor, Office of Inspector General, and U.S. Food and Drug Administration. Assistant United States Attorneys Laura K. Voorhees and Wade T. Napier, and ATF Associate Chief Counsel, Jeffery A. Cohen, prosecuted this case on behalf of the federal government.
This story was posted on 2016-12-24 05:38:38
Printable: this page is now automatically formatted for printing.
Have comments or corrections for this story? Use our contact form and let us know.
To sponsor news and features on ColumbiaMagazine, please use our contact form.
More articles from topic Kentucky:
Kentucky Level One drought declaration lifted
Louisville PD detective waives indictment in theft case
Lewis and Clark Bridge, East End Crossing Open to Traffic
District 3 crews battle first winter weather event of season
STABLE accounts offer new tax-advantaged savings option
Fayette man sentenced to 30 years in fentanyl death case
Kentucky's unemployment rate at 4.8 percent in November 2016
Kalamazoo, MI, man convicted of sex trafficking
Bevin names Terry R. Gill, Jr., to head Economic Development
Tolling to begin in Louisville and Southern Indiana crossings
View even more articles in topic Kentucky
Click for Info
Bank of Columbia
If You're Thinking of Selling,
Let Us Do the Yelling
Principal Broker & Auctioneer
Burton Real Estate
& Auction Service
Call Us For Appraisals
Click for Listings
On This Site
or Click Here
Columbia in the Movies
from the archives of
Click for Stories
The Best of
Local Stories of
The Greatest Generation
Order Book or e-Book
See who's celebrating
Birthdays and Anniversaries
Special Events List
Find Great Stuff in
Antiques, Help Wanted,
Autos, Real Estate,
Legal Notices, More...
ColumbiaMagazine.com content is available as an RSS/XML feed for your RSS reader or other news aggregator.
Contact us: Columbia Magazine and columbiamagazine.com are published by D'Zine, Ltd., PO Box 906, Columbia, KY 42728.