OXFORD, Miss. (WTVA) -- A North Carolina man has pleaded guilty to federal charges related to the sale of contraband cigarettes.
Calvin Phelps entered the plea to three counts in U. S. District Court.
He was indicted for fraud, money laundering, and trafficking in countraband cigarettes.
Court documents accuse Phelps falsifying documents showing the cigarettes were exported overseas to avoid paying fees related to the Master Settlement Agreement.
The MSA charges $5 per carton and is used for Medicaid programs in states who are part of the plan over settlements related to tobacco related illnesses.
The indictment says agents set up an undercover business in Guntown called G-Corp.
The indictment accuses Phelps of working with the company to act like they were shipping the cigarettes when in fact they remained in the U. S.
Court papers say over 997,000 cartons of cigarettes valued at over $3.1 million were sold to G-Corp.
The scheme defrauded the MSA program out of nearly $5 million.
Phelps will be sentenced at a later date.