Friday, May 02, 2008

Tax Evader Convicted

As the NY Times is reporting, one of the biggest evaders of cigarette taxes has been convicted in federal court: "The owner of a smoke shop on the Poospatuck Indian Reservation that prosecutors claim is a major supplier of black-market cigarettes was convicted of racketeering conspiracy on Thursday..." And it's about time. This one evader is probably responsible for more black market sales into NYC than any other single business; all the time claiming that, as an Indian, he's exempt from New York State law.

This claim was thrown out: "Prosecutors argued that Mr. Morrison sold huge quantities of cigarettes, which were not taxed, off tribal land to be resold in violation of federal law.
Technically, state law requires reservation smoke shops to collect taxes on cigarettes sold to people who are not members of a tribe, or who do not intend to smoke them on the reservation, but the law has never been enforced. Tribal leaders say that as citizens of the Unkechaug Nation, a 55-acre sovereign nation, they cannot be forced to collect state taxes."

Of course, Morrison's not even an Indian, but married a member of the tribe so he could proceed with his multi-million bilking of the state's tax payers: "His shop, Peace Pipe, supplemented sales from its small storefront by taking orders over the Internet and by telephone, the authorities said. The handful of smoke shops on the reservation sold at least 104 million packs of cigarettes last year, according to state records, making it one the state’s largest suppliers of tobacco."

All of those "sales" came at the expense of small store owners on Long Island and in NYC. Morrison has millions stashed away, and the Feds are going after his assets. Not so lucky are all of those store owners who've seen their profits go up in smoke.