LYNNWOOD — At first the Lynnwood man said the cigarette deliveries were done as a favor, but later admitted he was getting paid.
Now, he owes more than $1 million in taxes for selling tobacco without a license.
Seng Yun Kim, 57, allegedly used his business, Kim’s Company, to buy and sell cigarettes and other tobacco products.
The state Office of the Attorney General charged him with distributing tobacco without a license, first-degree attempted theft and filing a false or fraudulent tax return.
Officers from the state Liquor and Cannabis Board watched Kim from June 2016 to April 2017.
He’d visit tobacco wholesale and retail stores, carrying packages with brands officers recognized as cigarette and tobacco companies.
“Some of these packages were marked with words such as ‘Bouy,’ ‘Trop,’ ‘Fusion,’ ‘BLK,’ ‘King Mountain,’ and ‘Good Stuff,’ ” charging papers say.
Investigators secured a search warrant for Kim’s home and van, a white 2006 Chevrolet Express. Officers served the warrant in April 2017 and found a large number of cigarettes and other tobacco products, along with ledgers, bank statements and receipts from tobacco wholesalers.
Kim was arrested that day. He was read his Miranda Rights through a Korean interpreter, but waived them.
He then reportedly said he’d been selling tobacco without a license for six years, about four times a week.
“Kim initially claimed that the tobacco deliveries were a favor, but later admitted he adds a profit margin to the tobacco he delivers,” an investigator wrote.
Tobacco seized in the search had an estimated tax value of $3,157, according to documents filed in court.
“After consulting with (Liquor and Cannabis Board) officers, I realized Kim was likely distributing tobacco products without a license to avoid paying state tobacco taxes,” wrote Kim Triplett-Kolerich, a senior investigator for the Office of the Attorney General.
She looked into the suspect’s tax documents, and noticed Kim’s Company declared more than $1 million in wholesale revenue. None of it was from tobacco.
That led to an audit from the Department of Revenue. According to the assessment, Kim owed more than $1 million in taxes from transactions between 2015 and 2017.
Investigators spoke with Kim’s accountant, who believed Kim’s Company sold hats, T-shirts and other goods to small businesses, but no tobacco products.
Because of that, Kim caused the accountant to file “false and misleading tax returns,” charging papers say.
Kim was charged last week in Snohomish County Superior Court.