SWINOMISH TRIBAL MEMBERS INDICTED FOR CONTRABAND CIGARETTE SCHEME
Failed to Pay more than $10 Million in State or Tribal Tax on Cigarettes
Two members of the Swinomish Indian Tribe, C. MARVIN WILBUR, 71, his wife, JOAN C. WILBUR, 72, and their daughters-in-law, APRIL M. WILBUR, 44, and BRENDA R. WILBUR, 49, were arraigned today in U.S. District Court in Seattle on an indictment charging them with Conspiracy to Traffic in Contraband Cigarettes, and five counts of Trafficking in Contraband Cigarettes. The Wilburs owned and operated the Trading Post at March Point on the Swinomish Indian Reservation near Anacortes, Washington. At the arraignment today the defendants entered pleas of “not guilty.” All were released pending trial scheduled for September 14, 2009.
According to the indictment returned by the grand jury last month, between July 1999 and May 2007, the Trading Post purchased nearly 800,000 cartons of contraband cigarettes. These cigarettes did not have the requisite stamps indicating the taxes to Washington State or the Swinomish Tribe had been paid. The defendants then sold the cigarettes to the general public, generating at least $13 million in revenue. The defendants did not pay the tribal or state taxes of nearly $11 million.
On October 3, 2003, the Swinomish Tribe entered into a cigarette tax contract with the State of Washington to collect the cigarette tax from tribal retailers and use the tax proceeds to provide services for the Tribe. The contract required tribal retailers to get a tribal license. From April 2005 until June 2007, the Trading Post did not have a tribal license and did not pay any tribal tax. The WILBURs filed suit in federal district court seeking to stop the cigarette tax contract between Washington State and the Tribe. However, the lawsuit was dismissed by the district court and the dismissal was affirmed on appeal.
On May 15, 2007, law enforcement officers seized more than 3.6 million contraband cigarettes from the Trading Post. The indictment identifies for forfeiture the cigarettes and more than $120,000 in cash seized during the raid and from bank accounts. On July 2, 2009, in a related civil forfeiture case, United States District Judge Thomas Zilly granted the government summary judgment forfeiting these assets to the United States.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The charges are punishable by up to five years in prison and a $250,000 fine.
The Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), Internal Revenue Service Criminal Investigation (IRS-CI), and the Washington State Liquor Control Board investigated the case.
Assistant United States Attorneys J. Tate London, Mary K. Dimke, and Richard E. Cohen are prosecuting the case. Mr. London serves as the Tribal Liaison for the United States Attorney’s Office.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.