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Cigarette Tax Scams Land 7 in Jail for $48M Heist
Ashland, KY – Three Kentuckians and two Russian nationals, including Julie Coscia, Anthony Coscia, and John Maddux, Jr., were convicted in a multi-million dollar cigarette tax fraud scheme. The group, which also included Christina Carman, David White, Michael Smith, Alexander Sergeev, and Mikhail Serov, operated a complex network of mail order and internet businesses to sell untaxed cigarettes nationwide, defrauding federal, state, and local governments out of $48 million.
According to court documents, the defendants operated a number of businesses, including YKTR, ESR II, Cigarette Girl, AA Discount Cigarettes, and Payless Enterprises. They sold cigarettes at discounted prices, violating the Jenkins Act and the PACT Act, which required registering and reporting sales to state tax administrators.
The defendants also used the U.S. Mail to distribute cigarettes, disguising the packages as mail order gifts and other items to avoid detection. The schemes were uncovered after multiple trials and guilty pleas, with the defendants facing charges of conspiracy to commit mail and wire fraud, money laundering, and violations of the PACT Act.
Coscia and her husband, Anthony, were convicted of multiple counts in 2016, while Christina Carman was convicted of participating in the sale of domestic product. Maddux pleaded guilty to multiple conspiracies and making false statements to the Department of Labor. Sergeev and Serov pleaded guilty to conspiracy to commit wire fraud and conspiracy to violate the PACT Act.
The case highlights the severity of cigarette tax evasion, which defrauds governments of hundreds of millions of dollars in tobacco taxes and funds other criminal activity. The investigation was a joint effort by the U.S. Attorney’s Office for the Eastern District of Kentucky, the ATF, the IRS-Criminal Investigations, and the U.S. Department of Labor’s Office of Inspector General.
The defendants will face sentencing for their roles in the schemes, which have resulted in significant financial losses for state and federal governments. The case serves as a reminder of the importance of enforcing tax laws and preventing cigarette tax evasion.
Key Facts
- State: Kentucky
- Category: Drug Trafficking|Fraud & Financial Crimes|Violent Crime
- Source: DOJ Press Release â†â€â€
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