R.J. Reynolds Tobacco Company Alleges Fraud, Files Multi-Million Dollar Suit Against Various Wholesalers, Retailers and Individu
September 23 2005 - 5:41PM
PR Newswire (US)
WINSTON-SALEM, N.C., Sept. 23 /PRNewswire-FirstCall/ -- R.J.
Reynolds Tobacco Company 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. "This suit is about
stopping fraud, recovering our damages and sending the message that
we will vigorously pursue those who have been and continue to be
engaged in fraudulent activities related to our 'buy-down' and
coupon programs," said Jim Beckett, senior counsel for R.J.
Reynolds. "We have been investigating these activities for quite
some time and will prove the fraud committed against our company.
We look forward to recovering our damages and ultimately stopping
these schemes." 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. R.J.
Reynolds conducts buy-down and coupon promotion programs to provide
adult smokers with discounts on cigarettes purchased at retail. In
the complaint, totaling more than 140 pages, the company outlines,
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
of the 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 complaint outlines allegations that the
defendants are guilty of racketeering, unfair and deceptive trade
practices, civil conspiracy, as well as additional counts. 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 currently 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.
(APPCO) - 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 R.J.
Reynolds Tobacco Company (R.J. Reynolds) is an indirect wholly
owned subsidiary of Reynolds American Inc. (NYSE:RAI). R.J.
Reynolds is the second-largest tobacco company in the United
States, manufacturing about one of every three cigarettes sold in
the United States. R.J. Reynolds' product line includes five of the
nation's 10 best-selling cigarette brands: Camel, Winston, Kool,
Salem and Doral. For more information about R.J. Reynolds, visit
the company's Web site at http://www.rjrt.com/. DATASOURCE: R.J.
Reynolds Tobacco Company CONTACT: David Howard of R.J. Reynolds
Tobacco Company, +1-336-741-3489 Web site: http://www.rjrt.com/
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