COVINGTON, Ky. (WSAZ) -- Former Kentucky state lawmaker Hoby Anderson and two other eastern Kentucky businessmen are heading to federal prison after pleading guilty to charges relating to the sale of contraband cigarettes.

In a federal court case unsealed late Friday afternoon, Anderson, Corky Salyer, owner of Fitness World in Raceland, and David Lambert, the co-owner of Discount Wholesale Importers with Anderson between 2002 and 2005, pleaded guilty to a conspiracy that involved the sale of illegal cigarettes to an undercover informant. The pleas were signed late last year, but accepted in federal court in Covington Thursday.

On separate occasions in 2002 and 2003, Anderson, Lambert and Salyer sold more than 60,000 cigarettes to a person they knew was going to resell the cigarettes without paying a state excise tax. In 2003, they began negotiating to buy stolen cigarettes from the confidential informant. According to the plea agreement, the three believed the informant got the cigarettes from a Cuban-American criminal organization operating in Miami, Florida.

Anderson and Salyer pleaded guilty to four counts, including conspiracy to distribute contraband cigarettes, conspiracy to transport in interstate commerce, conspiracy to sell and dispose of stolen goods across state lines and money laundering. Salyer pleaded guilty to an additional count involving the distribution of a controlled substance, anabolic steroids.

Anderson was ordered to forfeit more than $1.3 million to the federal government. In lieu of that forfeiture, Anderson has agreed to give up $620,000 that was wired to a bank account controlled by the ATF during this investigation, $50,000 this week as part of his sentencing, an additional $100,000 within three years of sentencing, about $4,000 from his company DWI and four vehicles. Salyer and Lambert were also ordered to pay $50,000 upon sentencing this week.

In a sentencing memorandum filed by Salyer's attorney, Salyer was described as someone with extensive community involvement since 1976, including t-ball, summer camps and amateur boxing in the tri-state area.

Lambert pleaded guilty to distribution of contraband cigarettes and transporting in Interstate Commerce stolen goods.

All three men have been sentenced to serve one year and one day in the federal penitentiary in Ashland, beginning no later than September 14th.

September 2002-March 2003: Anderson, Salyer and Lambert sold more than 60,000 cigarettes to a person they believed was going to resell the cigarettes in a state other than Kentucky without paying the applicable excise tax. Person turned out to be a confidential informant (CI) for the ATF.

August 2003: Anderson sent Salyer and Jeremy Bates to Charlotte, N.C., to pick up 200 cases of purportedly stolen cigarettes from the CI.

October-December 2003: Anderson wired $198,000 from his DWI accounts to HMLS Holdings (the confidential informant’s “offshore” account)

April 2004: Anderson sent Salyer and Bates sent to Charlotte, N.C., to pick up 625 cases of purportedly stolen cigarettes from the CI.

May-December 2004: Anderson wired $500,000 to HMLS Holdings

May 2005: Anderson introduced the CI to a person who wanted to buy the stolen cigarettes. The CI delivered 422 cases of purportedly stolen cigarettes to the buyer, later identified as Kent Klee.

December 2005: WSAZ reported on massive federal sweep of Anderson’s and Salyer’s homes and businesses.

December 2008: Anderson, Salyer and Lambert enter guilty pleas for numerous Conspiracy and Money Laundering charges

July 2009: The pleas are accepted and the three men are sentenced to more than a year in jail.

September 2009: All three will begin federal prison sentences.

Source: Plea agreements signed by all three defendants.