Oklahoma's Seneca-Cayuga Tobacco Company bank account seized

In a late-breaking development, federal agents also raided the Wolf's Run Trading building on a Seneca Nation reservation in western New York and detained tobacco wholesaler William Parry.
by Randy Ellis Published: September 27, 2012
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Bell has an outstanding tax warrant in Oklahoma for more than $600,000 in delinquent cigarette taxes, records show. He could not be located for comment.

Federal agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives initiated their investigation into contraband cigarette sales in December 2009 after discovering untaxed cigarettes were being sold at a Kansas City convenience store, court records show.

Agents reportedly traced the cigarettes to a Kansas City-area company called Cheap Tobacco Wholesale LLC. They then proceeded to conduct an elaborate investigation that involved intercepted cellphone calls, tracking devices and a series of transactions in which undercover officers sold suspects several million packs of untaxed cigarettes.

Prosecutors allege that Seneca-Cayuga Tobacco Co. helped broker and conceal the sale of contraband cigarettes to a Nebraska distributor and a New York smoke shop.

The Seneca-Cayuga Tobacco Co. profited by keeping a portion of the New York state sales taxes that were evaded, prosecutors claim in forfeiture documents.

Alan Beck, a longtime Oklahoma City tobacco wholesaler, said Wednesday that he is glad to see federal officials taking some action, but he believes they need to go further and lock up violators.

Beck has complained to the Oklahoma Tax Commission and other state officials for at least seven years that illegal tobacco sales in the state have been costing the state and legitimate wholesalers millions of dollars.

He estimates the sale of untaxed cigarettes by rogue distributors has been costing the state between $1 million and $2 million a month in lost tax revenues.

Undercover ATF operations have actually harmed legitimate wholesalers – at least in the short run – by helping flood the market with cheap, untaxed cigarettes, he said.

“I can't compete with the government,” he said. “It's amazing anyone legitimate is still in business.”

After reviewing the Kansas City forfeiture court filings, Beck said it did not appear to him that Oklahoma and other states have been receiving tobacco settlement funds from the millions of packs of cigarettes that government agents have been selling during their undercover operation.

NewsOK.com has disabled the comments for this article.
by Randy Ellis
Investigative Reporter
For the past 30 years, staff writer Randy Ellis has exposed public corruption and government mismanagement in news articles. Ellis has investigated problems in Oklahoma's higher education institutions and wrote stories that ultimately led to two...
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