Tribal leaders accused of smoke-shop tax scam

Leaders of the Stillaguamish Indian Tribe lived in luxury for four years while Washington residents were cheated out of more than $25 million that should have been collected as state tax on cigarettes, according to a federal court indictment.

Edward Goodridge Sr., his wife, Linda, and their son, Eddie Goodridge Jr., are accused of making at least $55 million between March of 2003 and May of 2007 by selling tax-free cigarettes at their Blue Stilly Smoke Shop. The elder Goodridge is former chairman of the Stillaguamish Indian Tribe. Eddie Goodridge is the tribe’s executive director.

Sara Milliron Schroedl, a relative of the Goodridge family and one-time tribal councilwoman, also is accused of sharing in the wealth.

The tribal leaders made so much money that Eddie Goodridge spent more than $20,000 in cash one day in early 2006 at a motorcycle dealership, according to the indictment. Linda Goodridge on a day in June 2006 withdrew more than $27,000 in cash from her bank account, according to court documents.

All four are expected to face U.S. District Court Judge James Robart in Seattle today to answer for trafficking untaxed tobacco. They were each indicted Nov. 5 on five counts of conspiracy to traffic cigarettes and engaging in monetary transactions involving property derived from unlawful activity, all federal felonies.

Edward Goodridge and his son plan to sign plea agreements that will require them to pay back some of the money that should have gone toward anti-smoking campaigns, programs to end youth violence and public schools, lawyers for both men said Wednesday.

Zenon Olbertz, a Seattle attorney who represents Edward Goodridge Sr., said the plea deal has been in the works for months. He could not confirm exactly how much his client will be asked to pay back, but said it’s a “significant amount of money.”

“There’s also the potential of jail time,” Olbertz said. “Obviously it’s up to the judge.”

Eddie Goodridge’s attorney, Wayne Clark Fricke of Tacoma, said his client plans to be in court today to sign a plea agreement. He declined additional comment.

It’s not clear whether similar negotiations are under way involving Linda Goodridge or Schroedl. Calls to Schroedl’s attorneys were not returned, and it’s not immediately clear who is representing Linda Goodridge.

Trouble began for the Goodridge family in May 2007, when armed federal agents raided the Blue Stilly and the homes of Edward and Linda Goodridge and Eddie Goodridge. The couple’s younger son, Dean Goodridge, who was then manager of the Blue Stilly, complained the agents trashed the house and scratched vintage cars and sports cars that are part of the family’s vehicle collection.

Federal agents seized 3.5 million cigarettes from the Blue Stilly and 1.8 million cigarettes from an address in Clackamas, Ore., a suburb of Portland. Agents searched seven locations that day in Washington and Oregon as part of Operation Chainsmoker.

None of the cigarettes seized by the agents bore tax stamps required under state law. The Stillaguamish tribe didn’t sign a compact with the state governing cigarette sales until early this year.

The Blue Stilly has been raided before.

In 2001, state investigators seized evidence there 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 until 2003, when the Goodridge family told him to leave.

Eddie Goodridge later said his family disagreed with the way Paul did business.

Paul pleaded guilty early this year to running a cigarette smuggling ring that spanned the globe, with pieces of the network in China, Russia, Brazil, Paraguay, Baltimore and the Tulalip Indian Reservation.

Paul argued that he has the right as an American Indian to do business without government supervision, but that argument failed. He is now halfway through a year-long sentence of home detention.

The Goodridge family has always controlled the Blue Stilly Smoke Shop, which is located on a small slip of tribal land just off I-5 near Arlington. Between March 2003 and May 2007, according to court papers, the tribe leased the land to Native American Ventures, a company owned by the Goodridge family and Schroedl.

The four tribal leaders bought cigarettes from a wholesaler, then sold them at the smoke shop. Profits were funneled through Native American Ventures to Automotive Management Inc., owned by Edward Goodridge Sr. and Linda Goodridge; Fatham Investments Inc., owned by Eddie Goodridge; and SLM Investments Inc., owned by Schroedl.

Payments totaling about $5 million were made to each of the three companies during the four-year period, according to court papers. In total, the four tribal leaders raked in more than $15 million in cash.

Federal prosecutors have cracked down in recent years on cigarette smuggling schemes on American Indian reservations. Tribal members around the region have faced criminal charges in federal court related to the sale of untaxed cigarettes.

Reporter Krista J. Kapralos: 425-339-3422 or kkapralos@heraldnet.com.