HOGANSBURG Two Franklin County men have admitted to illegal manufacture of cigarettes on the St. Regis Mohawk Reservation, according to the U.S. attorneys office.
Robert C. Oliver Sr., 53, of Burke, and Jody Swamp, 48, Hogansburg, pleaded guilty to federal charges of one count each of manufacturing cigarettes without filing the bond and obtaining the required permit and one count each of failure to maintain records concerning the shipment, receipt, sale and distribution of cigarettes, according to the release from U.S. Attorney Richard S. Hartunians office. Both defendants have been released on their own recognizance.
The two, along with James Pierce, own and operate Crown Appeal Cigars, a business they started in 2012. The charges do not affect Crown Appeal, according to Mr. Pierce.
Everythings going good with Crown Appeal, he said. The charges are unrelated to Crown Appeal.
Mr. Oliver and Mr. Swamp said it was always their intention to obtain the proper licenses.
Mr. Oliver said they tried to obtain a Tobacco Trade Bureau license, which would have allowed them to manufacture cigarettes legally.
We applied for a license back in 2010, but the application was sent back, he said.
The men also said that Mr. Swamp had a manufacturers license issued by the St. Regis Mohawk Tribe that allowed him to sell cigarettes on the reservation.
The news release from Mr. Hartunians office said that between July 2010 and October 2011, the two did not have the required TTB permit and did not follow mandated federal record-keeping so they could evade payment of the federal excise tax about $10 per carton of cigarettes manufactured.
Throughout that time, the release said, the two made scores of shipments that included more than 10,000 manufactured cigarettes each to other New York locations as well as to Maine and Florida, without paying the required federal tax.
From a location on Frogtown Road within the reservation, 76,680 cartons were sent out, according to the release.
The two are scheduled for sentencing Aug. 3 in U.S. District Court, Utica.
The maximum sentence for the first count is up to five years of prison time and up to a $250,000 fine, along with three years supervised release and a $100 special assessment. The second charge comes with up to three years of a statutory maximum prison sentence, a fine of up to $250,000, up to three years of supervised release and a $100 special assessment.
Each defendant faces 24 to 30 months in prison under the plea deal, as well as a fine of up to $250,000 and $5 million in forfeiture with $1 million to be paid by the sentencing date. The $5 million is the governments estimate of the amount they made in the cigarette sales.
As far as the $5 million goes, we dont have it, Mr. Oliver said. We never had that amount of money.
He said he may have to sell some of his assets to come up with the money.
Mr. Swamp did not elaborate on how much money they made, but said they did not make $5 million.
Hopefully well have friends out there who will help us, Mr. Swamp said.