Three Canadian men pleaded guilty in federal court to a $17 million scheme to transport hundreds of thousands of contraband cigarettes.

They are among 18 co-defendants whom also pleaded guilty in a scheme to purchase cigarettes in Kansas City and transport them to retailers in Indian reservations across New York state. There the retailers would avoid a $4.35 per pack tax as well as appropriate tax stamps applied to the cigarettes.

Mark Bishop and Piotr Hoffman both of Montreal, Quebec, Canada pleaded guilty to aiding and abetting in the trafficking. Co-defendant David Bishop (brother of Mark) also pleaded guilty as well as pleaded guilty to participating in wire fraud.

David Bishop admitted to the trafficking through his company DKB Trade Concepts, which ran in Montreal, to transporting the cigarettes from July 2010 to January 2012.

Conspirators purchased more than $17 million worth of cigarettes from undercover ATF operations. Approximately 620,600 cartons of cigarettes (carton contains 10 packs of cigarettes) were transported to New York to the Indian reservations. Without the tax of $4.35, retailers were able to re-sell cartons by over $40 each. The total tax lost to the state of New York was more than $8 million. Perpetrators paid back that amount in restitution.

David Bishop admitted to receiving commissions or "brokerage fees".

Mark Bishop and Hoffman admitted to transporting the cigarettes. Hoffman was paid $11,000, but forfeited to the government. Mark Bishop was not compensated.