New York City has filed a lawsuit accusing 32 people of tax evasion on cigarette purchases. The cigarettes were purchased through a Louisville based company called Chavez Inc., which was raided by federal agents in late 2009.
The suit aims to recover $6.5 million in unpaid taxes, plus $13 million in penalties. The defendants include one woman who is accused of having almost $1 million worth of cigarettes shipped to her Brooklyn apartment over three years, which amounts to about 32,000 cartons.
Lawyers for Chavez have said the company was not legally obligated to collect taxes on out-of-state sales.
The United States Attorney’s Office for the Western District of Kentucky currently has an ongoing civil lawsuit against the company. The Department of Alcohol, Tobacco and Firearms has seized all of Chavez Inc.’s property.