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Four county “milestone” agreement against illegal cigarette trafficking reached

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CANTON — Noted as a milestone in the enforcement against illegal cigarette trafficking, St. Lawrence County has teamed up with three other New York counties to form an agreement to help halt trafficking of untaxed cigarettes from Indian reservations to locations in New York.

St. Lawrence County District Attorney Nicole M. Duve and district attorneys from Franklin, Chautauqua and Suffolk counties reached an agreement this week with Ohio-based Greenwood Motor Lines, which does business as R&L Carriers.

The company says it will refrain from violating New York law that prohibits shipping cigarettes that don’t have tax stamps for sale within the state.

Ms. Duve said the black market for cigarettes is such that there are ongoing efforts to avoid cigarette taxes.

“This agreement marks a milestone in the enforcement against illegal cigarette trafficking,” Ms. Duve said. “It underscores the fact that there are specific procedures provided for in the tax law for the sale and transportation of cigarettes in a lawful manner.”

Ms. Duve said her office worked in large measure with the New York State Department of Taxation and Finance and through the department with the other counties.

Through investigations, Ms. Duve said it was discovered that R&L Carriers had been transporting untaxed cigarettes. “Through the course of the investigation it became apparent that this company was involved in transporting untaxed cigarettes and it provided an opportunity for us to sit down with the trucking company and reach an agreement whereby they have agreed to a set of compliance procedures that will help them avoid future violations,” Ms. Duve said.

Additionally, the district attorney said the agreement gave prosecutors in the other counties the chance to underscore the importance of abiding by the law and to help prevent illegal trafficking of untaxed cigarettes.

“This assures that this trucking company will abide and comply with the law and hopefully this will serve to put other trucking companies on notice to encourage them to abide by the law as well,” Ms. Duve said.

The agreement says the company denies wrongdoing, though an investigation showed it delivered “Native brand” cigarettes to various New York counties. It also agreed to pay $140,000 to the American Lung Association and American Cancer Society.

Officials at the company’s corporate office were unavailable for comment Tuesday, but they said in the agreement that by complying with all the requirements of the agreement, the district attorneys of the four counties will not bring any criminal prosecution against the company for its role in transporting cigarettes in or for New York state from 2010 through Sept. 3, 2013.

Ms. Duve said the agreement came about after an investigation into two 2012 traffic stops in St. Lawrence County, a January stop in the town of Waddington and a second February stop in the town of Morristown, which revealed two different shipments of untaxed cigarettes by HCI Distribution, an Indian-owned distribution company in Omaha, Neb.

No taxes were paid on the cigarettes produced on the St. Regis Mohawk Reservation, which prompted state police to seize the cargo, which numbered cartons in the thousands, at a U.S. Border Patrol checkpoint, Ms. Duve said.

“The investigation is ongoing and this agreement is with (R&L Carriers) in their role in the transportation of untaxed cigarettes,” Ms. Duve said. “The investigation has led into a number of directions and this is not the only company that has surfaced during the course of this investigation.”

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