Cigarette conspiracy claims still swirl through Lee County

By Patsy R. Brumfield/NEMS Daily Journal

Tupelo FBI Special Agent Matthew Bullwinkel reportedly led a Feb. 16 Indian reservation raid for documents and vehicles related to a blackmarket tobacco investigation.
The Indian tribe – terming the search an “invasion” – isn’t happy and sued, saying their entry was a violation of the Yakama Treaty of 1855 and other federal laws.
Attorney General Eric Holder Jr. says the warrant to search the eastern Washington state reservation “was to seek evidence of a crime, contraband, fruits of crime, or other items illegally possessed” or used in the commission of a crime.
In this case, the allegations claim King Mountain Tobacco, housed on the Yakama reservation, engaged in efforts to avoid federal and state taxes on their cigarette sales.
Documents obtained by the Daily Journal earlier this year claim KMT officials repeatedly met with Lee County cigarette warehousers and illegally shipped their products through Mississippi to avoid the taxes.
No criminal charges have been made public against any KMT officials, although the federal documents claim they have been shown substantial evidence against them.
Nationwide network
Holder’s memo, written June 22, says the raid was looking for information about possible violations, including interstate transportation of stolen property, violations of the Contraband Cigarette Trafficking Act, mail and wire fraud, and money laundering.
“The subjects of the investigation are individuals and corporations, including King Mountain Tobacco, believed to be involved with a nationwide network dealing in the distribution and sale of contraband cigarettes,” he said.
Holder also noted that at least one federal circuit court held that a tribe’s sovereignty does not prevent federal agents from entering tribal land without permission.
The lawsuit was filed in March against the FBI, Department of Justice, Marshals Service, Treasury Department, their directors and about a dozen other governmental entities which participated.
Among those defendants are the City of Tupelo and Marshall County, who sent law enforcement officers with experience in a years-long federal investigation into a multi-state blackmarket cigarette scheme.
Recently the U.S. Attorney’s Office in North Mississippi filed court papers to seize nearly $1 million and some 22 vintage vehicles reportedly purchased with the proceeds of King Mountain’s alleged illegal activity.
The February raid in Washington state clearly was aimed at gathering a wide range of KMT documents and records from its White Swan compound.
Better All Auto Sales also was on hand to haul away the vehicles.
“Bullwinkel led the United States’ and county/local police officers’ invasion onto the Reservation,” the lawsuit claims. Later, it says, Bullwinkel told a Yakama councilman the nation was notified of the raid, apparently referring to a 6 a.m. text message.
According to the 50-page lawsuit, the tribe describes some of the action this way:
• At 5:12 a.m., Yakama County Deputy Sheriff Alan Klise told the dispatcher he was heading to White Swan with an FBI search warrant. He asked the dispatcher not to put it on the computer until 6.
• At about 6 a.m., FBI agent Jen Terami text-messaged the Yakama Nation’s public safety commissioner: “About to do a large search on the reservation and wanted you to hear about it from us 1st.”
As agents attempted to pursue their search, the lawsuit claims, Yakama law enforcement worried that tribe members “might arrive to confront the agents.”
• At 9:15 a.m., tribal police called the sheriff’s office to make sure Klise was OK.
The lawsuit also claims that on April 28, the federal defendants came back to serve subpoenas related to the Feb. 15 search warrant, “once again without notifying…” tribal authorities.
On June 22, Attorney General Holder asked the court to dismiss the lawsuit, saying the district court “lacks subject matter jurisdiction” to consider the Yakamas’ claims.
“The tribes do not challenge the validity of the search warrant at issue,” states Holder’s memorandum with the motion. Rather, he said, they contend they must have prior notice or consultation.
The King Mountain investigation is one more wrinkle into the U.S. Attorney’s Office examination of the cigarette scheme.
North Mississippi’s first notice came in April and May 2009, with what is now known as a “fake” raid on two Lee County warehouses.
Since then, Tupelo’s Jerry Burke has gone to prison for his part in the conspiracy and others have been or await sentencing for their guilty pleas.
patsy.brumfield@journalinc.com