JACKSON — State Auditor Stacey Pickering along with the Mississippi State Tax Commission has recovered $211,737 that will be returned to the state’s General fund following a lower-than-expected collection at the contraband tobacco auction held Oct. 27 in Tupelo.
The auction of over 900,000 cartons of cigarettes brought in $1.9 million; however, only $211,737 will be available to the state.
“Over $1.6 million was taken by the Alcohol and Tobacco Tax and Trade Bureau (TTB) for federal excise tax believed by TTB to be owed on the product,” Pickering said. “Since discovering this product in April and taking possession earlier this fall, we have petitioned the federal government for a waiver of the federal excise tax. Our Congressional delegation has been very supportive in our request for this waiver; however, the request was denied by the TTB resulting in the federal government taking the majority of the proceeds of the sale.”
In addition to the over $200,000 returned to the state, the Tupelo Police Department and Marshall County Sheriff also received $2,776 each in addition to other forfeited property owned by those associated with the warehouses.
On Nov. 24, Jerry Burke, 67, of Tupelo, and Randy Benham, 43, of Cordova, Tenn., waived indictment and entered guilty pleas before U.S. District Judge W. Allen Pepper in Greenville. The counts charged 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. In connection with his guilty plea, Burke forfeited to the United States over $1.6 million in cash, a 1982 Beech C90 Turbo Prop Airplane valued at over $700,000, a 2006 Chevrolet Suburban and a 2007 Chevrolet Suburban.
“This case remains ongoing,” said Pickering. “The State Auditor’s Office will continue to be of assistance to the federal agencies involved in investigating and prosecuting this case and will work to protect the reputation, integrity and tax dollars belonging to all Mississippians.”