September 22, 2014

State seizes illegal smokes

Officials with the Wisconsin Department of Revenue say more than 70,000 packs of contraband cigarettes were seized this week, as part of an operation carried out by agents.

The packs worth $430,000 were taken from FedEx offices in the state. The shipments were destined for land held by the Saint Croix Chippewa Indians of Wisconsin, Ho-Chunk Nation, and Bad River Band of Lake Superior Chippewa. They were shipped by HCI Distribution, which is located on the Winnebago reservation in Nebraska and owned by Ho-Chunk Inc. The company is not authorized to distribute tobacco products in the state.

DOR Deputy Secretary Jack Jablonski says none of the packs had state tax excise stamps affixed to them, which are worth $2.52 per pack to the state and are required when distributing cigarettes in Wisconsin. Without the stamps, the state would have lost over $176,000 in tax revenue. Jablonski says it is likely retailers on the reservations would have been reselling the packs.

AUDIO: Jack Jablonski, DOR (:28)

Jablonski could not say at this time if any additional legal action against the distributor or the tribes is planned.

In a statement, an HCI Distribution rep says “all of our products are tribally stamped and licensed by each tribe.”

UPDATE: This story was edited to reflect a statement released by HCI Distribution.