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MELVILLE, N.Y. -- Tobacco wholesaler, Harold Levinson Associates Inc., will pay almost $10 million to settle a civil case involving untaxed cigarette sales through two Seneca Nation reservations, according to The Buffalo News.
According to the accusations, the wholesaler distributed untaxed, unstamped cigarettes through two businesses run by Seneca Nation members, and in turn, they sold the cigarettes out-of-state.
U.S. attorney Terrance P. Flynn told The Buffalo News that millions of untaxed cigarettes were sold during the 14-month period that ended in April of 2002. "They were selling and shipping cigarettes out of state without the tax stamps required by the state. It's a violation of federal contraband laws," he told the paper.
"It appears that the Senecas who were involved were being take advantage of by non-Native Americans. After much investigation, we decided that the best way to proceed was a civil settlement that would return millions of dollars to the federal and state governments," said Flynn.
Levinson agreed to pay $5.05 million to the federal government. The remaining $4.86 million will go to the state government.
Levinson officials admitted wrong-doing when the civil settlement was filed. The settlement followed an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and the state Department of Taxation and Finance.