McGraw
CHARLESTON - State Attorney General Darrell McGraw is suing a Panama-based cigarette company for a second time, claiming it has not paid the proper taxes to the state.
In a lawsuit filed July 26 in Kanawha Circuit Court, McGraw says Keblon, S.A. did not place that mandatory amount of taxes in an escrow account.
"Defendant Keblon, S.A. has not placed into a qualified escrow account an amount equal to $.0167539, adjusted for inflation, per unit of individual cigarettes sold in West Virginia between Jan. 1, 2005, and June 23, 2005," the complaint says.
It adds that Keblon, S.A., which produces Euro and Hava Club brand cigarettes, sold at least 10,300,400 units during that time period and did not put $214,429.13 into the escrow account.
Senior Assistant Attorney General John Dalporto, who is handling the case, says McGraw's office has already won an earlier judgment against Keblon that removed it from the state's approved tobacco product sellers list.
Now he is seeking the taxes Keblon did not pay in 2005. He calls the company "a scoundrel, as far as tobacco manufacturers are concerned."
"We've already sued them once. We have a judgment against them. This is kind of like a leftover suit," Dalporto said. "We've got them off (the list). We're still suing them now for the months last year before we got them off."
Dalporto is hoping for judgment that forces Keblon to pay $214,429.13 into the escrow account and a civil penalty of 300 percent ($643,287.39).
Dalporto says a 300 percent penalty is enforced when it is proved that the company knowingly violated the tobacco products manufacturers' master settlement agreement. If it is not proved that Keblon knowingly violated it, which Dalporto says is unlikely because West Virginia is one of several states that has had problems with Keblon, then a penalty of only 100 percent will be enforced.
Crossing international borders to retrieve information against Keblon, Dalporto admits, has been tough.
"We ask for a lot of information when a company applies to be on the list. They seemed to be a legitimate company when we put them on," he said. "Now we don't know if they're still in Panama or they've moved onto Uruguary or Paraguary.
"That's what some of these business do. They act legitimate for a while and all of a sudden vanish."