Three Canadian men have pleaded guilty to their roles in a $17 million scheme to smuggle smuggled 620,000 cartons of cigarettes from Kansas City to New York.

Acting United States Attorney Tom Larson announced the pleas from Mark Bishop, 42, his brother Davis Bishop, 46, and Piotr Hoffmann, 43, all of Montréal, Quebec, Canada. Larson says the scheme was worth about $17 million in sales of cigarettes primarily on Indian reservations.

David Bishop owned and operated DKB Trade Concepts, a Canadian corporation located in Montréal. He admitted that he aided and abetted in the sale, possession, transportation, and reception of contraband cigarettes from July 2010 to January 2012. Mark Bishop and Hoffman admitted to transporting contraband cigarettes. They are among 18 co-defendants who have pleaded guilty to participating in a scheme to purchase premium-brand cigarettes in Kansas City and transport them to retailers on Indian reservations in New York, without the appropriate $4.35 per pack excise tax being paid or the appropriate tax stamps being applied to the cigarettes.

The benefit to those smoke shops was that they did not pay New York state cigarette taxes; thus, they could undercut the prices charged by off-reservation cigarette retailers by over $40 per carton. The total state excise tax lost to the state of New York was more than $8 million, which has been paid in restitution to the state by the perpetrators of the scheme.

Mark Bishop and Hoffmann pleaded guilty Thursday to aiding and abetting contraband cigarette trafficking. David Bishop pleaded guilty Wednesday to conspiracy to commit wire fraud and contraband cigarette trafficking.

Under federal statutes, David and Mark Bishop and Hoffman are each subject to a sentence of up to five years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.