AKWESASNE — Two Franklin County men who made $5 million by illegally manufacturing cigarettes on the St. Regis Mohawk Reservation recently pleaded guilty to federal charges.
In an appearance in U.S. District Court in Utica, Jody Swamp, 48, of Hogansburg and Robert C. Oliver Sr., 53, of Burke admitted to manufacturing cigarettes without filing the bond and obtaining the required permit and to failure to maintain records concerning the shipment, receipt, sale and distribution of cigarettes.
Oliver is president and Swamp is vice president of Mighty Mohawk Wholesale Distribution in Akwesasne.
THOUSANDS OF CASES
According to a news release from Richard S. Hartunian, U.S. attorney of the Northern District of New York, between July 2010 and October 2011, the pair manufactured cigarettes without a federal permit and failed to pay an excise tax of $10 per carton on the smokes produced.
The investigation revealed that Oliver and Swamp “had scores of shipments exceeding 10,000 cigarettes produced,” the release states.
The illegal cigarettes were distributed in New York, Florida and Maine, and without having proper records kept, Swamp and Oliver “could evade payment of the federal excise tax.”
Investigators said at least 2,556 cases — 76,680 cartons — of unlicensed cigarettes were shipped from a Frogtown Road location on Akwesasne.
Officials said the pair made a $5 million profit and that they will forfeit that money as part of their plea agreements.
The men are to be sentenced Aug. 3 before U.S. District Court Judge David Hurd to 2 to 2½ years in federal prison and three years probation each.
Swamp and Oliver are also expected to pay back $1 million of their $5 million profit by the time they are sentenced.
They were released without bail pending sentencing.
The investigation involved the New York field office of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the State Attorney General’s Office, the Internal Revenue Service, U.S. Customs and Border Patrol, Immigration and Customs Enforcement, State Police and the Petroleum, Alcohol, and Tobacco Bureau of the State Department of Taxation and Finance.
Hartunian said millions in federal-excise taxes are lost each year because of unlicensed cigarette makers on the reservation, creating an unfair advantage.
He vowed to work with federal and tribal officials to bring other manufacturers into compliance.
“Illegally manufacturing tobacco products is a crime that hurts law-abiding businesses and the health of our communities,” Attorney General Eric Schneiderman said in a news release.
“These guilty pleas will bring accountability for a scheme that had many victims.”
Email Denise Raymo: firstname.lastname@example.org