IRVING - The Wolf's Run Trading Post was raided by the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives on Wednesday.
The raid at the warehouse, 12795 Route 438, Irving, was based on a forfeiture complaint filed in U.S. District Court in Kansas City.
Don Ledford, Western District of Missouri public information officer, said only a complaint has been issued, no criminal charges have been filed. He said the U.S. District Attorney Office cannot make comment on the case. Ledford said the Buffalo ATF assisted in the investigation by seizing money and property from Wolf's Run.
According to The Associated Press, Wolf's Run owner, Will Parry, was taken into custody by the ATF.
Wolf's Run, according to the federal documentation, was involved in both securing the cigarettes from sellers in Missouri, but was also a purchaser of cigarettes with purchases totaling $389,475 during the investigation.
A.J.'s Wholesale, 12587 Route 438, Irving, is a tobacco distribution company owned by Aaron Pierce. Pierce owns several businesses, including Hurricane Management, which is an online and retail tobacco wholesaler. Federal officials allege A.J.'s Wholesale and Hurricane Management were a buyer of contraband cigarettes with purchases totaling at least $1,398,877.80 during the federal investigation.
According to the complaint, the transactions involved cigarettes with no stamps affixed to them to indicate taxes had been paid. Such stamps are required in New York. Tax stamps are not required for cigarette transactions between wholesalers, but the transactions must be reported to state revenue authorities by both parties involved in the transaction. Stamped and unstamped cigarettes must be reported.
During the investigation, ATF agents sold unstamped cigarettes to Cheap Tobacco Wholesale, who then allegedly sold them to others. Prosecutors contend that conspirators either did not report the transactions or supplied false information to state authorities about the transactions.
EVADING STATE TAX ON CIGARETTES
Allegations in the complaint, filed in June, indicated Cheap Tobacco Wholesale of Independence, Mo., was arranging cigarette sale transactions to evade state taxes. As part of the investigation, undercover ATF agents conducted more than 55 transactions involving more than 6.7 million packs of cigarettes with alleged conspirators between August 2010 and January of this year.
James Aboud, Cheap Tobacco Wholesale owner, was the investigation's original target, according to the court documents. After he died in October 2011, the undercover transactions continued with his successor.
Most of the cigarettes eventually were sold in New York, depriving that state of significant tax revenue, according to the federal complaint. Cheap Tobacco Wholesale allegedly started trafficking contraband cigarettes to New York in April 2011. On April 14, 2011, a Wolf's Run employee rented a truck and told an undercover agent the truck was rented under the sovereign nation, which made the truck a part of the Seneca Nation and prevented anyone but federal officials from searching it. According to the forfeiture complaint, A.J.'s Wholesale paid $263,080.80 for the April 14, 2011, cigarette delivery.
On May 6, 2011, another shipment was secured, with A.J.'s allegedly paying $388,260 for cigarettes for 180 cases of cigarettes, or 108,000 packs. A shipment May 16, 2011, resulted in Wolf's Run paying $154,395 for cigarettes and A.J.'s paying $295,509 - with tracking devices placed in the cigarettes showing the truck arriving from the undercover warehouse at Wolf's Run, driven in a rental truck by a Wolf's Run employee.
On June 23, 2011, a truck rented in Kansas City under the name of Wolf's Run, set to drop off in Angola, with tracking devices showing the truck arrived June 24 at 1198 Route 438, Irving. The forfeiture complaint states A.J.'s Wholesale paid $215,028 for cigarettes. The June 24 delivery is the first after Seneca Nation appeals of the state's cigarette taxation law were exhausted.
In addition to the smoke shops buying the untaxed cigarettes, the system involved several people in Nebraska, Oklahoma, Florida, New York and Canada
"Based on the analysis of records as summarized above, the United States believes ... conspired amongst themselves and others to broker, facilitate, promote and conceal the sale of contraband cigarettes to Totem Pole by providing false reports to Missouri, likely shipping cigarettes using Wolf's Run, and failing to obey the prepay tax system set up by the state of New York, thus defrauding the state of New York of tax revenue," the complaint states.