Another Central California Indian tribe has a beef with the federal government.
Federal agents seized more than $600,000 in cigarettes destined for the Big Sandy Rancheria, but tribal leaders say the cigarettes were improperly confiscated and have filed legal action to have them returned.
The eastern Fresno County tribe, perhaps best known for its Mono Wind Casino in Auberry, is a major cigarette distributor to other California tribes including Chukchansi, which has its own federal issues — its casino has been under court-ordered closure since October.
Big Sandy’s steady flow of cigarettes was cut down in February when the government stopped a delivery truck at the agricultural inspection station east of Barstow. Agents confiscated the load under the Contraband Cigarette Trafficking Act; the government contends that there was no evidence of payment of applicable state and local taxes, and that the company the tribe bought the cigarettes from isn’t certified by the state.
But the tribe said it’s not required to pay taxes, and isn’t required to have a state license as long as it only sells its product to other tribes and isn’t bound to deal only with state-approved distributors. The value of the cigarettes is $609,811, according to tribal documents.
The tribe says the “property is not contraband” in a motion filed in U.S. District Court in Los Angeles.
The tribe will go to court later this month to get the cigarettes back.
In the meantime, the federal government is not telling the tribe where the cigarettes are stored and the tribe doesn’t know if the cigarettes, which are perishable, could spoil.
According to the tribe’s legal motion, the government’s first seizure notice claimed the tribe was smuggling and was not a state-licensed wholesaler, and the manufacturer, a Canadian company, was not recognized in California under the Prevent All Cigarette Trafficking Act.
The California Tobacco Directory lists tobacco products from seven countries that can be sold in California, including Armenia and Paraguay, but Canada is not named.
A revised federal government notice issued at the end of March made no reference to smuggling or the trafficking law, the tribe’s motion said.
In its March 26 “amended notice of seizure,” the government says the tribe engaged in money laundering, use of criminally derived property and unlawful acts.
The cigarettes were confiscated from a tractor-trailer rig on Feb. 9 by plainclothes U.S. Customs and Border Protection agents. The tribe says that the cigarettes were acquired from a bonded warehouse in New York state. They were brought to the warehouse from the Six Nations Reserve in Canada, where the cigarettes are manufactured by an Indian industry. The Six Nations Reserve is just north of the New York border in the province of Ontario.
The Canadian-American border has been a hotbed for cigarette smuggling for 15 to 20 years, but Six Nations has not figured prominently in the investigations, according to Canadian and American news accounts.
Big Sandy contends that it doesn’t need a state license and its permits are valid, according to federal and state officials. The tribe also isn’t restricted by the California Tobacco Directory because the tribe is trading with other tribes, which are sovereign nations.
In a November email to tribal Chairwoman Elizabeth Kipp, a federal official says Big Sandy’s importer operating permit was valid, even though it had expired, because the tribe had applied in a timely manner for a new permit that had not yet been processed.
In 2008, the tribe applied for a state license to distribute cigarette and tobacco products. Kate Su, a business tax representative for the state Board of Equalization, told the tribe it was “technically not required to apply for a California distributor’s license due to the fact that you are under a sovereign nation.”
Because the importer’s permit is valid and no state license is required, the tribe’s lawyer said she doesn’t know why the shipment was stopped.
“We are still trying to figure out what the actual factual basis was and why the cigarettes were seized,” said Darcie Houck, a Sacramento-based lawyer. She said the answer may not come until Big Sandy gets its day in court.
No criminal charges are filed against tribal members. Government officials said they could not answer questions because of pending litigation.
The tribe distributes tobacco products from the Auberry rancheria to other tribes, including the Chukchansi, Tule River and Tachi-Yokut tribes and several Northern and Southern California tribes, said Kipp. The tribe only wholesales to other tribes, not to non-Indian wholesalers, she said.
Tobacco products represent a major economic development program for the tribe. Mono Wind Casino has 349 slot machines and is smaller than others in the Valley and foothills.
Kipp said the tribe previously received cigarettes before the seizure from the same company and in the same way.
After the seizure, the tribe has continued to get cigarettes, but Kipp said they are now ordering in smaller shipments.