Eight Charged in Cigarette Tax Scam

Photo Credit: KTVAEight Anchorage residents are accused of scamming the Municipality of Anchorage out of more than $1.3 million in tax revenue.

Prosecutors say the defendants are owners and operators of retail stores who collectively purchased cigarettes from two wholesale distributors in Anchorage and lied about where they were going to resell the products in order to avoid paying MOA taxes.

Court documents reveal the scheme took place from 2009 until October 2012.

Wholesale distributors rely on merchant customers to be honest about where they plan on reselling cigarettes. Federal prosecutors say the defendants told the wholesalers in Anchorage that the cigarettes were destined for retail stores in Kenai and Sterling, where there are no taxes on tobacco products.

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