Prison sentence for the president of the Puyallup smokehouse
A 43-year-old president of three Puyallup tribal tobacco stores was sentenced on December 10 by the Seattle U.S. District Court to 14 months in prison for a sophisticated money laundering program designed to evade state taxes on smokeless tobacco products, US Attorney Nick said. Brown. Anthony Edwin Paul was ordered to pay $ 1,764,818 in restitution to the Washington State Department of Revenue, plus a fine of $ 5,000. US District Judge James L. Robart told Paul: âMoney laundering is an integral part of criminal activityâ¦ You have turned the key that started this conspiracy.
“This sophisticated plan to avoid state tobacco taxes hurts all of our residents by reducing public funds used to pay for health care and treatment for tobacco-related illnesses,” said US Attorney Nick Brown . âThe plan gave non-tribal tobacco sellers an advantage over other retailers – encouraging tobacco consumption and increasing their profits while avoiding paying state taxes. ”
“Mr. Paul conspired to defraud the state for his own greed, by deceiving residents of Washington state with millions of dollars that would otherwise have been invested in services for the community,” said Bret Kressin, special agent IRS Criminal Investigations Officer (IRS -CI), Seattle Field Office. âFinancial fraud and tax evasion are not victimless crimes, and the IRS-CI will continue to investigate and bring to justice those who choose to commit these offenses. ”
According to records in the case, between 2009 and 2017, Paul was president of three tobacco shops on the Puyallup reserve that sold significant amounts of tobacco products to TK Mac, a non-tribal tobacco distributor. Most sales were in cash, and TK Mac did not report the purchases to the state, avoiding millions of dollars in excise taxes.
When TK Mac then resold the products for cash, the company had a problem as large deposits of money allegedly triggered a state scrutiny over its tobacco business. So, from 2013 until 2017, Paul and his accomplices embarked on a money laundering scheme: the tribal tobacco shops wrote checks to TK Mac as if the tribal tobacco shops had bought money. tobacco products in the non-tribal store. In fact, TK Mac simply provided tribal smokehouses with large sums of money equal to checks. No tobacco product changed hands, but TK Mac received an excise tax credit. As a result of this cash-for-check program, Washington State suffered losses of approximately $ 3.86 million. The global scheme caused the state losses of several million more dollars.
Paul had a stake in the success of TK Mac, having made loans to the owners of the non-tribal retail business, TK Mac, of nearly $ 2 million. TK Mac owners Hyung Il Kwon and Tae Young Kim also pleaded guilty for their role in the scheme. One of the tribal smokehouse workers, Theodore Kai Silva, also pleaded guilty. Judge Robart will convict Kwon, Kim and Silva in January 2022.
Following the indictment of Paul’s accomplices, the government seized more than $ 5 million from Kwon and Kim. The restitution amount outstanding from the check payment system is $ 1,764,818. Judge Robart ordered Paul to pay this amount as restitution (together with Kim and Kwon), as well as the fine of $ 5,000.
The matter was investigated by the IRS-CI, with assistance from Homeland Security Investigations. The case was continued by Deputy U.S. Attorneys James Oesterle and Jonas Lerman.
THE SHADOW PAST OF THE TRIBE
The Puyallup Tribe’s history of trouble with the law dates back to the mid-1970s, when tribal member Robert Satiacum established himself as an entrepreneur with his gambling empire of alcohol and cigarettes. It wasn’t long before he became increasingly involved in prosecutions and allegations of serious crimes resulting in frequent raids, arrests and prosecutions. Much of his legal problems stemmed from selling items like contraband cigarettes without collecting or paying taxes.
On May 5, 1976, Satiacum and four of his employees were indicted by a federal grand jury with operating an illegal gambling business. In April 1982, he was ousted from his post as president of the Puyallup tribe for allegedly organizing a contract murder attempt against fellow tribal member and political rival, Ramona Bennett. A single shot from a passing car narrowly missed Bennett, and Satiacum was arrested along with three other men and charged with racketeering, extortion, arson and conspiracy to murder.
With these legal problems, and more, in front of him, Satiacum fled to Canada. He remained there as a fugitive for almost nine years before being arrested in 1991 for failing to appear for a conviction for indecent assault. Satiacum died the same year of a heart attack after being taken to hospital from a Vancouver jail.
Further gambling plots occurred in the late 1970s when Puyallup Tribe President Bertha Turnipseed and two others were sentenced to 60 days in prison for operating a gambling casino in Fife prior to legalization. games in the Puyallup reserve. The Federal Bureau of Indian Affairs also had an eye on the tribe, canceling the tribe’s line of credit in 1982 due to the tribe’s inability to provide the required reports, invoices and other financial documents on how the funds were received. were spent. The same happened with the federal Department of Health and Human Services following an audit of the tribe’s health facilities which found that $ 650,000 of federal health funds had been spent but not counted.
Former Tribal Council member and President David Bean has also not been without a consideration of issues with his tobacco store ownership, leading him to strike a deal with the federal government and the Internal Revenue Service. After his then-board colleagues Sylvia Miller, Roleen Hargrove, and Larry LaPointe filed a formal complaint against him with the FBI, they met with FBI agents to voice their suspicions about the alleged drug activity of Bean.
Bean’s family members were among six people arrested in Pierce County in October 2009 following a lengthy investigation of prescription drug trafficking from the Indian Smoke Shop in Puyallup Tribal Trust territory in Milton and from the Lil Red Smoke Shop in Tribal Trust territory in Tacoma. During the investigation, members of the tribe were seized with grocery bags filled with pain reliever bottles bearing labels from the Puyallup Tribal Clinic.
In February 2011, following a two-week jury trial, Billy Miranda Flores was convicted of conspiracy to distribute oxycodone, three counts of distributing oxycodone, possession of methadone in intent to distribute and possess a firearm as part of a drug trafficking crime. . Evidence at trial revealed that Flores sold hundreds, if not thousands, of Oxycontin (oxycodone) tablets with methadone every day. He was sentenced to 20 years in prison.Bill Celeya Flores, 60, of Tacoma, father of Billy Miranda Flores, was sentenced to 57 months in prison; Jay Timothy Morehead, 24, was sentenced to 18 months in prison; and Shelbie Ingham, 19, served a nine-month prison sentence. Tiny Bean-Flores, 29, of Tacoma, and Danny Sherwood were also convicted.