ARLINGTON – Federal agents raided the Blue Stilly Smoke Shop on Tuesday, part of an investigation into alleged untaxed cigarette sales by tribal members in Washington and Oregon.
The shop is on property owned by the Stillaguamish Indian Tribe, but it is operated privately by the tribe’s executive director, Eddie Goodridge Jr.
Dubbed “Operation Chainsmoker,” agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives served seven search warrants in both states, ATF spokeswoman Julianne Marshall said.
Marshall declined to discuss specifics about the Arlington raid, adding that search warrants in the case were under a court’s seal.
The simultaneous morning raids were part of an ongoing investigation that aims to preserve fair markets for tobacco products among nontribal and tribal business, she said.
About 10:30 a.m., more than a dozen ATF agents descended on the drive-through cigarette shop owned by Goodridge on Highway 530 just east of I-5.
The raid was on a private business, Stillaguamish Tribal Chairman Shawn Yannity said.
Authorities are dealing with Goodridge, not the tribe, he said.
“The tribe doesn’t have anything to do with this,” Yannity said.
Goodridge was out of town Tuesday and did not immediately return calls.
Agents were still collecting evidence late Tuesday afternoon. At least two large rental trucks were backed up to the store as agents conducted their search.
Yellow police tape closed the driveway, and a handwritten cardboard sign told customers the store was not operating Tuesday.
The case revolves around alleged sales of cigarettes that have not been taxed, officials said.
All cigarettes sold in Washington must carry a state-certified stamp indicating that they have been taxed. The taxes are collected by the state, or in some cases by Indian tribes, said Tim Thompson, a state Liquor Control Board Tobacco Tax Unit spokesman.
Some tribes sell cigarettes under a compact with the state, and those taxes are diverted back to the tribes, he said. Tribes without a compact must pay the state taxes collected on cigarette sales.
The Stillaguamish Tribe does not have a compact covering cigarette sales, Thompson said.
In contrast, the Tulalip Tribes have had a compact since 1979 and have operated a smoke shop for at least 30 years, said John McCoy, general manager of Quil Ceda Village, the tribes’ retail and casino complex.
The Tulalip Tribes’ smoke shop has never been investigated for its cigarette sales, McCoy said.
Long lines of cars typically fill the Blue Stilly Smoke Shop’s driveway, where cigarettes often are advertised at bargain rates.
When cigarettes are sold well below market prices, there’s usually a reason, Thompson said.
“The tax isn’t being paid,” he said.
Nontribal businesses deserve to compete on fair playing fields, he said.
Other tribes lawfully selling cigarettes have asked for increased enforcement of untaxed cigarette trafficking, officials said.
Tulalip Tribes Chairman Melvin Sheldon said his tribe has never asked the state or the federal government to investigate any other independent or tribal-owned smoke shops.
The Blue Stilly Smoke Shop has been raided before.
In 2001, state investigators seized evidence as part of a probe into untaxed cigarette sales. At the time, the shop was operated by Stormmy V. Paul. A Tulalip tribal member, Paul ran the smoke shop as a private business and paid taxes to the Stillaguamish Tribe.
Paul in 2005 was charged under a 44-count federal indictment alleging cigarette smuggling, money laundering and racketeering. The case involved cigarettes manufactured in China and money smuggled to bank accounts in Paraguay.
In September 2006, Paul pleaded guilty to trafficking in contraband cigarettes. He is awaiting sentencing, court records show.
Goodridge and his father, Ed Goodridge Sr., who was then tribal chairman, took over the smoke shop in 2003.
On Tuesday, tobacco shops near Anacortes and in Olympia also were targeted, as well as homes and warehouses, including a secondary warehouse in Clackamas, Ore., Marshall said.
No arrests have been made in connection with the raids, Marshall said.
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