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[ INDUSTRY NEWS]
R.J. Reynolds alleges
retailer fraud in lawsuit
R.J. Reynolds Tobacco Company, Winston-Salem, N.C., has filed a multi-million dollar lawsuit in U.S. Federal Court for the Western District of North Carolina. The suit alleges that various wholesalers, retailers and other individuals conspired to defraud the company.
Several retailers that have admitted a role in the schemes are cooperating with R.J. Reynolds. Other wholesalers, retailers and individuals that may have been involved in this conspiracy may be named as defendants at a later date.
In the complaint, totaling more than 140 pages, the company outlined, among other things, how the defendants diverted buy-down money to their own pockets through the use of fraudulent cigarette orders and sales invoices. The complaint further sets forth that certain defendants used improperly obtained coupons, in lieu of cash, to purchase R.J. Reynolds’ discounted cigarettes from the retailer defendants who were authorized by the company to accept such coupons.
The company is seeking more than $20 million in compensatory damages and attorneys’ fees. Compensatory damages awarded under federal and state racketeering or state unfair trade practice counts can be tripled.
Wholesalers, retailers and individuals named in the suit include:
- Market Basket Food Stores, Inc., Taylorsville, N.C.
- Stephen Hunt, owner and operational manager of Market Basket Food Stores, Inc.
- RJ Marketing, Inc., Kingsport, Tenn
- Jason Carpenter, co-owner and operational manager of RJ Marketing, Inc.
- Ronald Clark, co-owner of RJ Marketing, Inc.
- J&L Distributors, Weber, Va.
- Foster Qualls, owner of J&L Distributors
- Dave’s Distributing, Troutman, N.C.
- Dave Ritchie, owner of Dave’s Distributing
- Appalachian Oil Company, Inc., Blountville, Tenn.
- Jeffrey H. Benedict, president of APPCO
- Daniel Blackburn, president of convenience-store operations for APPCO
- MAP of Virginia d.b.a. Wholesale House Tobacco Outlet (WHTO), Abingdon, Va.
- Michael Patrick, owner of WHTO
- Hileman Tobacco Stores, Saint Paul, Va.
- Danny Hileman, owner of Hileman Tobacco Stores
- BCW Properties d.b.a. Holiday Foods, Wilkesboro, N.C.
- James Crump, owner of Holiday Foods
- DWI, LLC, Russell, Ky.
- Hobart Anderson, owner of DWI, LLC
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