Federal prosecutors are wrapping up — without going to trial — an investigation of eight people accused of smuggling millions of dollars worth of cigarettes from North Idaho to tribal smoke shops in western Washington.
A trial date was cancelled Friday with guilty pleas from four final defendants, including accused ringleader Louie Mahoney, of Plummer, Idaho.
The latest guilty pleas came eight months after at least three defendants from western Washington cut plea-bargain deals with federal prosecutors and agreed to testify against Mahoney and other co-conspirators living in North Idaho, court documents reveal.
The smuggling operation between 1999 and May 2003 cost the state of Washington an estimated $56 million in lost taxes, according to Jim McDevitt, the U.S. attorney for the Eastern District of Washington.
As part of the investigation and an earlier companion case involving six other defendants, a special task force seized $5.1 million in cash and more than 200,000 cartons of cigarettes.
Defendants in both cases agreed to forfeit the cash and cigarettes to the federal government as a condition of their plea agreements.
The “central conduit” of the conspiracy, court documents say, was Louie Mahoney, who ran the multi-million dollar a year contraband cigarette trafficking organization from his home in Plummer, on the Coeur d’Alene Indian Reservation.
Mahoney’s criminal enterprise engaged in shipping, transporting, receiving, possessing, selling, distributing and purchasing of contraband cigarettes, court documents say.
He and co-conspirators also were involved in money laundering the proceeds from the contraband cigarette sales, mail fraud, interstate transportation in aid of racketeering and cigarette record-keeping violations.
Mahoney did not have a Coeur d’Alene tribal license to sell tobacco products, court documents say.
Doing business as JKL Enterprises, Mahoney ordered untaxed cigarettes from wholesale suppliers in Spokane and elsewhere, using two retail stores owned by relatives on the Coeur d’Alene reservations as fronts.
The cigarettes and other tobacco products actually would be delivered to Mahoney’s home on U.S. Highway 95, near Plummer, the documents say, before being shipped to a dozen tribal smoke shops in western Washington.
There, business was brisk because non-tribal customers could buy the cigarettes without paying the $14.25-per-carton state tax. In Washington, cigarettes must bear either tax-paid stamps or tax-exempt stamps.
Mahoney, 61, and his two sisters, Margaret R. Jose, 61, and Christine Mahoney-Meyer, both of Plummer, pleaded guilty Friday in U.S. District Court in Yakima to conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act. Check out Snus Nicotine
Roger Fiander, 67, of Wapato, Wash., also pleaded guilty to conspiring to violate the federal anti-racketeering law.
In accepting the latest guilty pleas, U.S. District Court Judge Robert Whaley ordered background reports on the four defendants and scheduled sentencing for Aug. 28 in Yakima. They are free on bonds or other conditions until sentencing.
Written plea agreements signed by the defendants and approved by the court were not filed immediately as public documents.
Their guilty pleas came after earlier guilty pleas from four other defendants indicted in the same case – Gerald …