Port Orchard man sentenced to 4 years for tobacco-tax evasion

A federal judge sentenced a Port Orchard man to four years in prison Friday for buying and selling tobacco products in Pierce County and elsewhere without reporting the sales to the state or paying the proper taxes.

Hyun Seung Kim, 45, previously was convicted of wire fraud and tax evasion.

Kim, owner and manager of tobacco wholesaler CP Trading Co., also was ordered to pay $2.5 million in restitution to the state for tobacco taxes owed, the U.S. Attorney’s Office in Seattle reported.

U.S. District Court Judge Ronald Leighton handed down the sentence.

“You knew it was wrong because you went to such extremes to manipulate the system, always deflecting attention from yourself to others,” Leighton told Kim.

Court records show that between 2009 and 2013, Kim’s company bought non-cigarette tobacco products, including cigars and smokeless tobacco, on the Puyallup Indian Reservation, paying cash for most of the purchases but paying by check for some.

Kim reported the purchases made by check to the state but failed to report those made with cash, the records state.

His company then resold the products to gas stations and smoke shops around the Puget Sound region, including in Pierce, Thurston, Mason and Kitsap counties, again failing to report the cash sales, the records show.

Kim deposited many of the proceeds into accounts opened in his relatives’ names to hide the money from regulators, the records state.

His attorney, Wayne Fricke, wrote in a sentencing memorandum that Kim had a gambling problem and used some of the proceeds to pay off debt accumulated in Nevada.

Adam Lynn: 253-597-8644