UPDATE: Former Cherokee Tobacco President Pleaded Guilty to Four Counts

UPDATE: The former president of Cherokee Tobacco in South Boston pleaded guilty Thursday morning to four different counts involving tax evasion and wire fraud.

Kathy Farley was originally charged with 47 different counts, but as part of a plea agreement, she pleaded guilty to four of those charges on Thursday. Those counts include Fraudulent Refusal or Evasion to pay Cigarette tax, wire fraud, amongst others.

The judge stated in court that Farley would be responsible to pay back more than $4-million in restitution. The company will also pay back almost $10-million for tobacco taxes.

The U.S. Attorney's Office says Farley was taking the extra money she wasn't claiming as part of the company's taxes, and using it to buy vehicles and other assets. They also said Farley deposited money from the company directly into her coffee shop business.

If you add up the maximum amount of time Farley could serve for each guilty count, she's looking a maximum of 38 years in prison. Each count also includes up to a $250,000 fine. Farley sentencing date is set for December 3. She will remain out on bond until then.


UPDATE: The U.S Attorney's Office wants to revoke the bond for the former president of Cherokee Tobacco in South Boston. Kathy Farley is facing multiple counts of tax evasion and fraud.

The U.S Attorney's Office said part of conditions of her release is that she were to have no contact with any potential victims or witnesses. They claim Farley has sent abusive and intimidating text messages to witnesses, and has posted abusive messages towards the company and witnesses on social media.

Farley's trial date is scheduled for the end of the month.


South Boston, VA - South Boston, VA - One year after federal agents executed a search warrant at the Cherokee Tobacco headquarters in South Boston, more details have finally surfaced on just what led to that investigation.

The company has been very tight-lipped on the investigation, but court documents show that search was related to an alleged scheme to commit tax evasion.

Those documents, first uncovered by a local blogger, detail the results of a 12 month investigation into Cherokee Tobacco, its parent, Firebird Manufacturing, and president of both, Kathy Farley.

According to an affidavit, a witness contacted the IRS in 2012 to report invoices and records that had been altered to lower the company's excise taxes.

The documents go on to detail transactions between Farley and a tobacco wholesaler - who was a cooperating witness - in which she allegedly sold cartons of cigarettes lower than regulatory price.

Agents with the IRS, FBI and USDA participated in last year's search and they seized multiple items from the premises.

No charges have been filed in this case, but Farley is no longer employed with the company.

Cherokee Tobacco declined to comment on the documents.