Oct 11, 2012

C.R.E.A.M: Cigarette brokers face fraud charges over taxes

For my non-hip hop fans, C.R.E.A.M means "Cash Rules Everything Around Me"

Now back to the regularly scheduled tax show......

A tobacco distributor closely watched by federal agents for a decade along with two relatives were charged in Kentucky with using phony invoices to avoid paying taxes on millions of dollars' worth of cigarettes sold in several states.

A federal grand jury in Louisville on October 4th charged 42-year-old Pedro "Peter" Bello of Miami, his sister, Caridad Bello of St. Louis, and her husband, Juan Hernandez of St. Louis, with conspiracy to commit wire fraud and money laundering in an effort to avoid paying $2 million to Kentucky in taxes on cigarettes.

Federal investigators have been tracking Pedro Bello since at least 2002, when prosecutors in Texas sought to secretly listen to cellphone conversations involving him. He was linked to several large-scale investigations and named in a civil lawsuit brought by the city of New York over untaxed cigarettes. A federal grand jury in Louisville initially charged him in October 2011, but re-indicted him a year later with his sister and brother-in-law.

Authorities say he bought massive amounts of cigarettes in Kentucky but used invoices written by GT Northeast in Missouri, a company he owned in St. Louis, to avoid paying Kentucky sales taxes by making it appear that the sales originated in Missouri. He then sold the cigarettes around the country while pocketing bigger profits by avoiding the Kentucky tax.

The indictment says that Bello's Louisville-based company GT Northeast avoided paying on $12 million worth of cigarettes it sold.

Prosecutors want Bello to forfeit $2 million if he's convicted.

No comments: