As a result of these schemes, Washington State suffered losses of more than $10 million. No tobacco products changed hands, but TK Mac received an excise tax credit. In fact, TK Mac simply provided the tribal smoke shops with large amounts of cash equal to the checks. So, beginning in 2013 and continuing until 2017, Kwon and his coconspirators engaged in a money-laundering scheme: the two tribal smoke shops wrote checks to TK Mac as if the tribal smoke shops had purchased tobacco products from the non-tribal store. When TK Mac then resold the products for cash, the company had a problem, since large deposits of cash would have triggered state scrutiny of its tobacco business. Most of the sales were in cash, and TK Mac failed to report the purchases to the state, thus avoiding millions of dollars in excise taxes. The schemes involved two tribal smoke shops on the Puyallup reservation which sold significant quantities of tobacco products to TK Mac, the non-tribal tobacco distributor. Kwon has a substantial restitution obligation, which will follow him even after he serves his prison term."Īccording to records filed in the case, between 20, Kwon engaged in two schemes to defraud the state of tobacco excise taxes. This didn't just hurt the state coffers, it gave his business a competitive advantage over other small stores," said U.S. Kwon repeatedly laundered cash and created false invoices to avoid paying tobacco excise taxes. Robart noted that Kwon has a prior state conviction from a similar tobacco fraud scheme, and said, "You have almost no respect for the law whatsoever when it gets in the way of making money." Kwon conspired with others to cheat the state out of tobacco excise taxes he also evaded more than $850,000 in federal income taxes. Hyung Il Kwon of Henderson, Nevada, was the secret owner of TK Mac, a company that owned and operated two smoke shops in Federal Way and Lynnwood, Washington. District Court in Seattle to 26 months in prison, announced U.S. Contact: - A leader of a scheme to cheat Washington State out of more than $10 million in tobacco excise taxes was sentenced today in U.S.
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