Two Charged with Falsifying Tobacco Reports

June 30, 2010 - OXFORD, MS—William C. Martin, Acting United States Attorney for the Northern District of Mississippi, Daniel McMullen, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in Mississippi, and Phillip M. Durham, Special Agent in Charge of the New Orleans Field Division, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), announce that:

Robert Ammerman, 69, of Falmouth, Kentucky, and Mike Ammerman, 47, of Cynthiana, Kentucky, doing business as Farmers Tobacco in Cynthiana, Kentucky, entered guilty pleas today before United States District Judge Sharion Aycock in Oxford, Mississippi. Each waived indictment and pled guilty to a one-count Information charging him with making and causing to be made false monthly tobacco reports.

Acting United States Attorney William C. Martin stated: “The guilty pleas entered today by Robert and Mike Ammerman are the product of a continued collaborative law enforcement effort by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Marshall County Sheriff’s Office and the Tupelo Police Department. The United States Attorney’s Office is committed to continued cooperation with each of these agencies to curb this and other types of fraudulent activity.”

Each man faces a maximum possible penalty of not more than three years in prison; not more than a $250,000 fine; and not more than one year supervised release.

In connection with their guilty pleas, the Ammermans agreed to forfeit to the United States $8,000,000 in cash, representing the proceeds of their unlawful activity. This forfeiture is one of the single largest cash forfeitures in the history of the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Daniel McMullen, Special Agent in Charge of the Federal Bureau of Investigation in Mississippi stated: “The guilty pleas entered today reflect the continuing benefits achieved by the hardworking, dedicated officers and agents from local, state, and federal agencies who worked side by side on this investigation. Because of their efforts, this complex, multijurisdictional, multi-million-dollar scheme to evade payment of taxes through the sale and distribution of contraband cigarettes has come to an end.”

Phillip M. Durham, ATF Special Agent in Charge said, “ATF is committed to working with our federal, state and local partners to stop criminal groups that profit from the transportation of contraband cigarettes. In these hard economic times, selling untaxed cigarettes puts our law-abiding merchants at a huge disadvantage. The legal tax revenue collected on tobacco products goes toward improving our schools, our highways and our quality of life. The selling of untaxed cigarettes must be closely watched and dealt with as soon as possible. With federal, state and local entities all working together, we are accomplishing just what we set out to do. This task force looks forward to continuing this investigation, seizing the proceeds of these enterprises and placing the culpable parties behind bars.”

Copies of the Information and Factual Basis for each defendant are attached.

The investigation of these cases is a joint effort by the FBI, ATF, Mississippi State Auditor’s Office, the Mississippi State Tax Commission, the Marshall County Sheriff’s Office and the Tupelo Police Department. The cases are being prosecuted by Assistant United States Attorneys Chad Lamar, Clay Joyner and Clyde McGee. The forfeitures are being handled by Assistant United States Attorney Sam Wright.