Ky. businessman pleads guilty in cigarette case

A Louisville businessman has pleaded guilty to conspiring with others to avoid paying taxes on cigarettes sold online.

Assistant U.S. Attorney Randy Ream said 48-year-old Israel Chavez's plea also settles a civil forfeiture case between his companies and the government. Chavez entered the plea Monday afternoon in federal court in Louisville.

Chavez admitted to working with others to sell untaxed cigarettes from his online companies, Chavez Inc. and Cigarettes Direct to You.

By processing the orders through an out-of-state company, prosecutors say Chavez shorted Kentucky out of more than $2 million in excise taxes.

U.S. Magistrate Judge Dave Whalin set Chavez's sentencing for Aug. 7.

The case is linked to a Florida businessman and two others who have pleaded not guilty to taking part in the alleged tax avoidance scheme.

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