SWINOMISH TRIBAL MEMBERS SENTENCED FOR CONTRABAND CIGARETTE SCHEME
Failed to Pay more than $10 Million in State or Tribal Tax on Cigarettes
Two members of the Swinomish Indian Tribal Community, C. MARVIN WILBUR, 72, his wife, JOAN C. WILBUR, 73, and their daughters-in-law, APRIL M. WILBUR, 45, and BRENDA R. WILBUR, 50, were sentenced today in U.S. District Court in Seattle to Conspiracy to Traffic in Contraband Cigarettes. The WILBURs owned and operated the Trading Post at March Point on the Swinomish Indian Reservation near Anacortes, Washington. C. MARVIN WILBUR was sentenced to a year and a day in prison and 3 years of supervised release for the cigarette trafficking conspiracy and for conspiracy to launder monetary instruments. His wife JOAN WILBUR was sentenced to five months in prison and five months of home confinement, and three years of supervised release for the same two charges. Each daughter-in-law was sentenced to 90 days of home confinement and three years of supervised release. All four defendants are jointly responsible for $10.9 million in restitution. At a lengthy sentencing hearing U.S. District Judge Marsha J. Pechman remarked that it is important to send a message to those involved in these cigarette sales. “If everyone in the tribe is not following the same rules, someone is harmed,” Judge Pechman said.
According to the plea agreements, 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 May 15, 2007, law enforcement officers seized more than 3.6 million contraband cigarettes from the Trading Post. Under the terms of the plea agreements, the WILBURS will forfeit the cigarettes and more than $130,000 in cash seized during the search and from bank accounts.
While law enforcement was executing a search warrant at the Trading Post and their home, MARVIN and JOAN WILBUR went to local banks and moved $1.2 million dollars. JOAN WILBUR cashed out certificates of deposit and applied more than $603,000 to existing business loans. MARVIN WILBUR went to another bank and cashed out more than $608,000 worth of certificates of deposits and cashier’s checks. They did this knowing that some of the money came from the illegal sale of contraband cigarettes. This conduct constitutes the Conspiracy to Launder Monetary Instruments, to which both JOAN and MARVIN WILBUR pleaded guilty. Under the plea agreement the couple will forfeit an additional $603,299 in cash or equity in property to the government.
Writing to the court, the Swinomish Tribal Chairman Brian Cladoosby said the WILBURs refused to pay tribal taxes on the cigarettes, depriving the tribe of millions in tribal revenue. “The Tribe's members were denied education, health and other benefits that could have been supported with the tax revenues, and the Tribal government was deprived of resources that would have fostered its self-determination and economic self-sufficiency.... The Wilburs lived high on the hog, and the Tribe got crumbs from the table, if it got anything at all,” Tribal Chairman Cladoosby wrote to the court. Since the WILBURs’ stores stopped selling cigarettes, the Tribe has made $5 million in cigarette tax revenue used for police protection, health, education and welfare programs, tribal housing, elder care, youth programs, natural resource protection and enhancement, economic development.
The WILBURS have reserved the right to appeal various legal issues related to their convictions to the court of appeals. Judge Pechman ruled that the restitution payments into an escrow account will begin immediately, but she said they would not start serving any prison sentence until the appeals are decided.
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.