According to the plea agreement, Kyong Hee Kim knowingly purchased illegally obtained tax exempt cigarettes from Sun Sims and her business partner who owned, operated, and managed Up in Smoke, located in the Municipality of Anchorage, and Golden Eagle Tobacco and Longmere Lake Grocery and Liquor, both located outside the Municipality of Anchorage. Because they owned Golden Eagle Tobaccoand Longmere Lake Grocery and Liquor, Sun Sims and her partner could legitimately purchase Municipality of Anchorage excise tax exempt cigarettes from tobacco wholesale distributors located in the Municipality, but only if those cigarettes were actually transported outside of the Municipality and offered for sale at those two stores. However, cigarettes that they purchased within the Municipality and intended to sell at Up in Smoke or distribute to others within the Municipality were not excise tax exempt.
Between 2009 and October 10, 2012, Sun Sims and her partner used their Golden Eagle Tobacco andLongmere Lake Grocery and Liquor store accounts with tobacco wholesale distributors within the Municipality to purchase excise tax exempt cigarettes that they intended to sell and distribute within the Municipality. Thus, they avoided paying the excise tax and increased their own profits.
Kyong Hee Kim, who owns and operates the Mini Stop, paid a fee to Sun Sims and her business partner for the purchase of excise tax exempt cigarettes. Kyong Hee Kim paid this fee for the tax exempt cigarette in an effort to avoid paying the tax owed to the Municipality. Sun Sims and her partner would collect payment from Kyong Hee Kim and other retailers. They would then convert the money collected into cashier’s checks that appeared to be purchased by either Golden Eagle Tobacco or Longmere Lake Grocery and Liquor. They then used these cashier’s checks to purchase more tax exempt cigarettes, which they delivered to Kyong Hee Kim and the other retailers within the Municipality.