Saturday 28 October 2000

Mohawks get hefty cigarette-smuggling fines

GEORGE KALOGERAKIS
The Gazette

A judge imposed $192 million in fines yesterday on eight minor players in a Kahnawake cigarette-smuggling ring even though none could ever pay such amounts.

The judge then immediately converted the mandatory fines into conditional sentences and community service.

"They are all not in a position to pay the minimum fines," said Quebec Court Judge Celine Lacerte-Lamontagne. "One is not surprised by this assertion as one would ask who would be able to pay such a fine."

That means the eight Mohawks won't have to pay the fine or even go to jail for taking part in a ring that cost Canada about $24 million in lost tax revenue.

The ring was broken up in 1997 after the RCMP thoroughly infiltrated its operations at the South Texas Ranch warehouse on the reserve. The Mounties even set up a dummy trucking operation to move cigarettes and contraband booze for the ring.

The eight Mohawks sentenced yesterday worked in the warehouse or "smoke shacks" selling the contraband to non-Indians. Each made about $300 a week.

"Without their implication, the warehouse would not have operated properly," the judge said.

They did not share in profits. The profits went to two ringleaders who pleaded guilty two years ago. Matthew Lazarre was hit with a $25-million fine and Brian Jacobs was fined $20 million.

Because they also couldn't pay, they got sentences of five years in jail. They are already out on parole.

Yesterday, the judge said she had no choice but to hand out the $24-million fines. Federal law says cigarette smugglers must pay a minimum of 16 cents for every cigarette and 11 cents per gram of loose tobacco that evaded taxation.

The fine added up because an undercover agent was able to show the Mohawks handled at least 11,628 cases of smuggled cigarettes and 8,184 cases of loose tobacco.

Defence lawyer Andre Gagne said the fines made no sense.

"Twenty-four million dollars for someone who made $7 an hour?" he asked.

Gagne said the problem is that if 200 smugglers touch the same box of cigarettes, each of them is liable for the total amount of unpaid taxes on that box.

Prosecutor Fabienne Simon didn't appear happy with the conditional sentences of between one year and two years less a day.

She had fought for between one and four years in prison if the Kahnawake residents couldn't pay the fines.

"I will reserve my comments for now," Simon said.

Prosecutors had argued that jail time was the proper punishment if the people couldn't pay fines.

But the judge said Quebec's Court of Appeal recently decided conditional sentences are just as appropriate.

Lacerte-Lamontagne said such sentences can show society's disapproval. And the Mohawks don't require jail because they are not a danger to society.

But the Mohawks could end up in jail if they don't pay much smaller fines also imposed yesterday.

Those fines are for another part of the smuggling operation that brought in 10,000 bottles of booze from the United States.

Sheila Lazarre, the sister of the ringleader, must pay $20,000. She served as the warehouse accountant.

Edwin Regis, the warehouse manager, must pay the same amount.

Because their roles were not as important, Keith McComber, Martin Morris, Lanny Lazarre and Matthew Stacey must pay $15,000 each. And Tracey McComber and Loanne Lazarre must pay $5,000 for their small roles.

All had argued they hadn't broken any law because the reserve is a tax-free zone. One even called himself a political prisoner.

The RCMP spent years and more than $1 million investigating the smuggling ring, including paying a petty crook to infiltrate the warehouse and work there for more than a year. The Mounties paid Terence McDonald $1,500 a week while he was among the Mohawks, and another $130,000 afterward. He is now in the witness-protection program.

An RCMP undercover officer became so trusted by the ring that he became the trucking contractor who delivered the contraband from the U.S. to Canada.