NEW YORK - Mayor Michael R. Bloomberg, Chief Policy Advisor John Feinblatt, Corporation Counsel Michael A. Cardozo and Finance Commissioner David M. Frankel have announced the results of an undercover investigation into illegal cigarette sales at the Poospatuck reservation on
“A law intended to protect the sovereignty of Native Americans has been exploited to fill the pockets of bootleggers and crooked cigarette dealers,” said Mayor Bloomberg. “Although
“In 2009, sales of un-taxed cigarettes on reservations accounted for one third of all brand-name cigarette sales in
“This video confirms our ongoing allegations that cigarette sellers on the Poospatuck Reservation are flouting the law,” said Corporation Counsel Michael A. Cardozo. “Native Americans have every right to sell to reservation residents, but that’s not what’s going on here.
“This is another example of legitimate businesses being criminally undercut by those who steal from the City coffers,” said Finance Commissioner Frankel. “We will use all civil and criminal enforcement mechanisms at our disposal to go after anyone who thinks they can cheat the people of this city and get away with it.”
The Department of Finance’s Office of Tax Enforcement is responsible for detecting and working with prosecutors to punish the criminal evasion of
Native Americans are permitted by law to purchase and possess unstamped cigarettes on which taxes have not been pre-paid, but only for personal use or re-sale on the reservation to other tribe members. Stores on the Poospatuck Reservation illegally sell cigarettes to bootleggers in sales that are subject to taxation.
The Federal Contraband Cigarette Trafficking Act, 18 U.S.C. § 2341, makes it a felony – and also gives rise to civil liability – to sell cigarettes without tax stamps in states where the cigarettes are subject to tax. The New York Cigarette Marketing Standards Act also includes civil liability for selling cigarettes without including amounts for all taxes required by law. Cigarettes sold by Native Americans to the public are taxable and by law must bear tax stamps in
In September 2008, Mayor Bloomberg and Corporation Counsel Cardozo announced that the City had filed a complaint in the Federal District Court for the Eastern District of New York against eight Long Island businesses located on the Poospatuck reservation for illegally selling cigarettes on which State and City taxes had not been paid, in violation of the Federal Contraband Cigarette Trafficking Act and State law. The City’s investigation had documented sales by these reservation businesses of nearly 24 million cartons of contraband cigarettes since 2004. In August 2009, Judge Carol B. Amon issued an injunction barring further sales to the public of untaxed cigarettes by the defendants named in that suit.