Saturday, October 18, 2008
Government seizes Hawker jet in cigarette tax fraud case
BY MOLLY MCMILLIN
The Wichita EagleGary Hall, owner of a
Kansas wholesale tobacco company, and seven business associates are
charged in a 43-count indictment in an alleged scheme to avoid
paying $25 million in cigarette taxes that would have gone to the
state of Oklahoma and Indian tribes, the U.S. attorney's office said
Friday.
Hall, president and owner of Sunflower Supply Co.
in Galena, and his wife, Donna, took delivery of the Hawker 4000 in
a ceremony at the company in June. The super-midsize business jet
carries a list price of $21 million.
"If he's acquitted, he'll get his plane back,"
said Jim Cross, a spokesman for the U.S. Attorney's office in
Kansas.
Other personal property is also listed in the
forfeiture.
Defense attorney Dan
Monnat, who represents Hall, said the federal charges
involve the complex structure of cigarette taxes in the state of
Oklahoma.
"Gary Hall is a well-respected businessman and
philanthropist from southeast Kansas,"
Monnat said. "He vigorously asserts his innocence of
these accusations and welcomes a jury trial that will make that
clear."
Hall, who lives in Joplin, Mo., owned and
controlled other businesses, including Rebel Industries and Discount
Tobacco Warehouse, according to the indictment.
The investigation began in 2006 when the Kansas
Highway Patrol stopped a vehicle in Coffeyville carrying a load of
cigarettes worth more than $200,000 without the required documents
and appropriate tax stamps, the release said.
Hall and the others allegedly conspired to defraud
the state of Oklahoma and Indian tribes that share in the proceeds
of cigarette taxes, the office said.
Companies controlled by Hall and the other
defendants allegedly stamped cigarettes for sale at smoke shops in
lower tax rate areas, but the cigarettes were sold at smoke shops in
higher tax rate areas.
"They carried out the scheme through a variety of
means, including communications by Internet and fax and money wire
transfers," the release alleges.
They also allegedly funneled payments and orders
through a third-party corporation called Gawkskey Inc.
Cigarette trafficking cases are complex
investigations that involve money laundering, fraud and tax evasion,
Michael Boxler, Alcohol, Tobacco, Firearms and Explosives special
agent in charge in Kansas City, said in a statement.
|