Stephens City man accused of illegal cigarette sales
By Joe Beck
A Frederick County grand jury has indicted a Stephens City man on 10 counts of crimes connected to the illegal sale of cigarettes in his store.
The defendant, Frank Weaver Welch Jr., is also facing legal trouble in U.S. District Court where he agreed Friday to pay $36,800 to the federal government in lieu of two vehicles the government was trying to seize from him as a result of the cigarette case.
An affidavit filed in federal court by a special agent with the Internal Revenue Service describes a cigarette sales operation that tallied 300,000 cartons from August 2011 to June 2014 at the Veterans Food Mart at 121 Fairfax Pike in Stephens City.
The charges against Welch — five counts of money laundering and five counts of obtaining money by false pretenses — arose from a joint investigation conducted by the Frederick County Sheriff’s Office, the Virginia Department of Alcoholic Beverage Control, the Virginia Alcohol and Tobacco Tax and Trade Bureau and Internal Revenue Service.
The affidavit states that $14.9 million poured into a bank account maintained for deposits from Veterans Food Mart and Frank and Lois Gail Welch between Jan. 1, 2012 and May 31, 2014.
The affidavit accuses Welch of failing to file required tax forms for numerous sales in which Welch received $10,000 from a single cigarette sale transaction or two or more related transactions.
The affidavit also accuses Welch of failing to file and maintain required information when selling more than 50 cartons of cigarettes in a single transaction.
The investigation included surveillance operations during which deputies from the Frederick County Sheriff’s Office would repeatedly see Welch leaving Veterans in a pick up truck, or Jeep Wrangler, buy hundreds of cartons of cigarettes from a large membership-only retail club and return to his residence and sometimes to Veterans where he would unload as many as 300 cartons of cigarettes.
The affidavit also states that Frederick County Sheriff’s Office deputies noticed “a dramatic increase” in cigarette sales in the county after the closing in late 2011 of a multi-state federal investigation into illegal cigarette sales. The sales increases noted by the deputies were among stores, including Veterans, that were not targeted by the federal investigation.
Contact staff writer Joe Beck at 540-465-5137 ext. 142, or firstname.lastname@example.org