NYC: Poospatuck Illegal Cig Sales Caught on Tape

New York City investigators say cigarette dealers at the Poospatuck Indian reservation have been caught on undercover videotape illegally selling untaxed smokes for re-sale at city bodegas.

One alleged seller at a Mastic smokeshop says on tape “the less I know, the better” during the sting operation, part of Mayor Michael Bloomberg’s ongoing fight to stop reservations statewide from selling untaxed cigarettes that end up in the city, which he says cheats the city out of tax revenues.

Native Americans are allowed to buy untaxed cigarettes on reservations, but only for personal use and not for resale, as of a federal judge’s ruling last year that effectively shut down some of the largest shops on the reservation. Those stores have since been replaced by new shops not covered by the court order.

In an effort to prove shops are flouting the law, Bloomberg’s administration sent undercover agents to Long Island last week. He announced the findings Thursday.

The investigators, who wore hidden cameras, told two separate sellers they were buying cigarettes to sell in New York City, and were able to purchase 60 cartons of untaxed smokes.

“I have to do a re-sale, you know, in Brooklyn,” said one investigator who bought 30 cartons of Newports.

“I don’t want to know any information that you’re talking about because our cigarettes are for personal use,” the saleswoman told him. “Should I know that you’re going to resell them, I can get in trouble. So the less I know the better.”

In the other videotaped sale, the investigator told the saleswoman: “I have to resale, I have to make, basically, you know some money on it.”

Unkechaug Nation Chief Harry Wallace suggested in a statement that the tape was edited and said the tribe does not support breaking the law.

“Our goal is to protect the lawful retail trade of tobacco for personal use,” he said.

Wallace, along with the Oneida Nation on Thursday, also blasted Bloomberg for his remark last month that the governor should get “a cowboy hat and a shotgun” and enforce the state tax law.

“Now the mayor is retaliating instead of apologizing for his indefensible statements,” Wallace said.

State records show that cigarette sales on the reservation have dropped, but business continues to be robust. The city has accused several merchants who were covered by the court order of secretly reorganizing and continuing to do business through relatives or front companies.

Bloomberg said in a statement that “a law intended to protect the sovereignty of Native Americans has been exploited to fill the pockets of bootleggers and crooked cigarette dealers.”

New York’s Indian tribes say treaty rights exempt them from having to pay the state’s $4.35-per-pack sales tax on cigarette purchases from wholesalers.

For decades, state authorities have hesitated to enforce it out of deference to their sovereignty claims.
Gov. David Paterson announced the state would begin collecting the tax, but the effort was delayed after some tribes sued in federal court in Buffalo.

An appeals court this week declined to block the enforcement of the new law, giving the go-ahead to the state to begin collecting the tax.


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