AKWESASNE - Two local men admitted to illegally making cigarettes on the St. Regis Mohawk Reservation, federal officials said Friday.
Robert C. Oliver Sr., 53, of Burke and Jody Swamp, 48, of Hogansburg pleaded guilty to federal charges of one count each of manufacturing cigarettes without filing the bond and obtaining the required permit and one count each of failure to maintain records concerning the shipment, receipt, sale, and distribution of cigarettes, as stated in the release from U.S. Attorney Richard S. Hartunians office.
The two are scheduled for sentencing on Aug. 3 in Utica.
The maximum sentence for the first count is up to 5 years of prison time, up to a $250,000 fine, along with three years supervised release, and a $100 special assessment. The second charge comes with up to three years of a statutory maximum prison sentence, a fine of up to $250,000, up to three years of supervised release, and a $100 special assessment.
If the court accepts the terms of the plea deals from the defendants, each defendant faces a 24 to 30 month prison term. After release, each would have three years of supervised release, a fine up to $250,000, $5 million in forfeiture with $1 million to be paid by the sentencing date, and a special assessment of $200.
Until sentencing, both defendants have been released on their own recognizance.
According to court documents, the two men admitted between July of 2010 and October of 2011 their operation manufactured cigarettes onAkwesasne without the required permit from the Alcohol and Tobacco Tax and Trade Bureau of theU.S. Department of the Treasury and failed to pay the federal excise tax of approximately $10 foreach carton of cigarettes produced.
Prosecutorsr said he defendants had scores of shipments exceeding 10,000cigarettes made to locations elsewhere in New York, and to Florida and Maine, all withoutcomplying with federal record-keeping requirements so they could evade payment of the federalexcise tax.
At least 2,556 cases totaling 76,680 cartons of unlicensed cigarettes were shipped froma property on Frogtown Road on Akwesasne, according to a release from the U.S. Attorneys Office. The $5,000,000 forfeiture represents the amount ofprofit realized by the defendants from their illegal cigarette manufacturing.
United States Attorney Hartunian said, Each year, the United States loses millions of dollarsin federal excise taxes as a result of unlicensed cigarette manufacturing operations on Akwesasne.Manufacturers who do not pay their excise taxes have an unfair advantage over licensedmanufacturers on and off Akwesasne, as they can charge lower prices and reap substantial extraprofits. The U.S. Attorneys Office will continue its work with federal and tribal authorities to bringunlicensed cigarette manufacturing operations on Akwesasne into compliance with federalregulations. We are appreciate very much the cooperation and outstanding work in this case by theBureau of Alcohol, Tobacco, Firearms and Explosives and the New York State Attorney Generals