A Marysville man is the central figure in a 44-count federal indictment alleging conspiracy to smuggle millions of dollars of contraband cigarettes into the country and sell them at tribal smoke shops in Pierce County.
Stormy V. Paul, a Tulalip Tribes member who used to run the Stillaguamish Tribe’s smoke shop at Smokey Point, is charged with multiple counts, including money laundering and conspiracy.
The indictment, announced Monday, alleges that Paul worked with seven other conspirators to launder $7.43 million in illegal cigarette sale profits and avoid paying $3.3 million in taxes to the state.
The case was developed after June 8 raids by federal officers on several Puyallup Tribe smoke shops, and Paul’s home on Old Tulalip Road. On that day, U.S. Immigration and Customs Enforcement agents seized $85,000 cash, 85 casino chips valued at $100 each and nearly $19,000 held in a bank account when agents raided Paul’s residence.
Paul, 40, is the only person named in the indictment who is not directly associated with a tribal smoke shop.
Others named include Lyle Shawn Conway, 32, of Tacoma; his father, Lyle Wayne Conway, 68, of Fife; Silas Cross, 64, of Fife; Gerald George, 32, of Tacoma; Elizabeth “Vicki” Gord, 48, of Tacoma; and David Turnipseed, 49, and his son, Joshua Turnipseed, 26, both of Fife.
According to the indictment, Paul typically arranged to have cigarettes manufactured in China and Paraguay to be shipped to Portland, Ore., with waybills reflecting that the shipments were destined for Idaho.
Instead of going to Idaho, Paul allegedly used family members and friends to bring the cigarettes to Washington state and the Pierce County smoke shops.
The government alleges that Paul sold at least 2.4 million packs of contraband cigarettes over 600 separate transactions.
Paul was not a licensed cigarette wholesaler from March 2002 through June 2004, and he could not lawfully possess untaxed tobacco, the indictment says.
He’s also accused of frequently structuring deposits into various bank accounts in the U.S. to avoid currency transaction reporting, a violation of federal law, the government alleges.
On at least one occasion, Paul also hired a courier to bring several hundred thousand dollars in cash across the country to disguise that the money was bound for Paraguay, the government said.
“The conspirators are alleged to have engaged in as many as 900 financial transactions designed to launder” the proceeds of illegal sales, the U.S. attorney’s office said.
It’s a federal crime to possess or sell contraband cigarettes anywhere, including on tribal land, Western Washington U.S. Attorney John McKay said.
“The law does not grant tribal enterprises or individual shop owners on the reservation … an artificial competitive advantage over all other businesses in the state,” McKay said in a statement.
He stressed that the indictments are not aimed at the Puyallup or any other tribe.
Several federal and state agencies participated in the investigation.
If convicted, the conspirators would face up to five years in prison and a $250,000 fine on each count in connection with illegal smuggling and trafficking. The money laundering charges carry a maximum penalty of 20 years in prison and a $500,000 fine.
In addition, the government will seek confiscation of the $7.4 million in illegal profits from the operation, according to the indictment.
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