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U.S.-Canada Smuggling Trial Set to Start (fwd)
Vise tightening Larry Miller as
trial approaches
By Aaron R. Gifford, Associated Press, 10/26/98 00:21
MASSENA, N.Y. (AP) - A newspaper article about L. David
Jacobs's confession to a racketeering charge hangs above
liquor bottles at a local pub. Someone scribbled next to the
headline, ``$10,000 reward.''
The bartender jokes about the scribble, saying it depicts the
dark humor of her clientele. Larry V. Miller, a regular
customer, barely cracks a smile.
Miller has reasons to be worried: L. David Jacobs, a former St.
Regis Mohawk Tribal Council chief, is a former business
associate of his. The evidence against him as the kingpin of a
$687 million tobacco and liquor smuggling ring has come to a
head, and the trial starts Nov. 2 in U.S. District Court,
Syracuse.
Most of Miller's crew has already entered guilty pleas or
agreed to cooperate with the prosecution on charges that they
were part of a conspiracy to move contraband tobacco and
liquor into Canada through the Akwesasne Mohawk
Reservation in the early 1990s, when taxes on Canadian
cigarettes were as high as $2 a pack. The market for
high-profit smuggling was huge, and the St. Lawrence River
was underpatrolled and mostly wide open. The people involved
in the operation became arrogant, boastful and eventually
overconfident.
There was Charles Williams, a Hogansburg bar manager who
brokered contraband liquor and tobacco deals between Miller
and reservation businessmen for 25 percent of the profits on
each buy. After Miller secured enough of his own connections,
court documents said, he cut Williams out of the action. In
1994, Williams began cooperating with authorities.
Three years later, 21 people were indicted on smuggling,
money-laundering and racketeering charges.
Richard A. Rancati, a former Las Vegas casino food and
beverage manager who moved to the reservation in the
mid-1990s to run an Indian gaming operation, pleaded guilty to
smuggling conspiracy charges in September in U.S. District
Court. He and other Miller associates allegedly duped
Canadian Customs officials into thinking the liquor and
cigarette shipments were bound for Europe. That ruse allowed
them to sell their goods on the Canadian black market.
Jacobs, who in 1992 allegedly granted Miller an illegal tribal
liquor license to sell liquor to reservation warehouse owners for
a total of $32,000 in kickbacks, submitted his guilty plea a few
weeks after Rancati. Jacobs and former casino owner Anthony
L. Laughing stand accused of accepting more than $185,000
in bribes or extortion payments for their political influence in
both the smuggling ring and illegal gambling on the
reservation.
Even Miller's relatives -- son Nick T. Miller, daughter Victoria
Glines and son-in-law Timothy Glines -- have pleaded guilty to
the lesser smuggling and conspiracy charges to avoid
money-laundering convictions, punishable by five-year prison
sentences and $250,000 fines.
``He did whatever Larry directed him to do,'' lawyer George E.
Hildebrandt said of his client, Glines. He told The Watertown
Sunday Times that Glines often transported more than
$10,000 in cash across the U.S.-Canadian border and
converted the money into U.S. funds at a Canadian currency
exchange business without reporting the transaction to U.S.
Customs officials, as required under federal law.
After Jacobs's guilty plea, the smuggling conspiracy counts
against the remaining suspects were dismissed. Attorneys for
both sides say the ruling will make it easier for the jury to
understand whether there were intentions to defraud the
government, as opposed to charges that there was a
conspiracy to aid in outbound smuggling.
The money-laundering charges remain intact. That crime is
punishable by up to 20 years in jail and a $500,000 fine.
According to court documents, Miller conducted cash
transactions exceeding $78.9 million between 1992 and 1996.
Under federal law, the Internal Revenue Service must be
informed of any cash transaction exceeding $10,000. In that
same period, Niagara Falls businessmen Lewis Tavano and
Robert Tavano Jr., who also supplied contraband to the
reservation, conducted $38 million in illegal transactions.
Meanwhile, John W. Fountain quietly changed $300,000 to
$500,000 in Canadian currency per week into American
currency for Mohawk businesses at his currency exchange
business. His clients included Fabian and Gail Hart, who,
according to court documents, purchased truckloads of
untaxed cigarettes from the Miller and Tavano organizations,
stored them in their warehouses and sold them to individual
smugglers.
Fountain, a retired state trooper who also owned a security
service, now claims much of the evidence against him was
obtained illegally. The judge will consider his request during a
suppression hearing the morning of the trial.
Although lawyers involved with the case refuse to speculate,
it's clear that quite a few people could point the finger at
Miller;
he claimed the Tavanos introduced him to RJR tobacco
company executives. Whether he will try to hold the Canadian
cigarette companies responsible for his illegal activity remains
to be seen.
``I think that will be looked into,'' said Miller's lawyer,
Richard
P. Ferris, Utica.
Court records said an informant observed Miller and RJR
salesman Les Thompson discussing black-market operations
during a fishing trip in British Columbia, and Thompson
threatened to start selling cigarettes to the Mohawks directly if
he didn't get a bigger chunk of the black-market profits.
In July, U.S. District Court Judge Thomas J. McAvoy threw out
Miller's motion to have the charges against him dismissed.
Miller claimed that if the tobacco companies that sold him
cigarettes were not prosecuted, he should not be prosecuted.
The judge has also thrown out a motion from Loran Thompson,
a Mohawk who allegedly bought untaxed cigarettes from the
Harts and resold them on the Canadian black market, to have
the case against him dismissed because the prosecution's
case discriminated against Mohawks. Yet the Mohawk
defendants will still probably base their defenses on Indian
sovereignty, lawyers said.
A guilty verdict against the Mohawk defendants could threaten
relations between Indians and the U.S. and Canadian
governments. The Akwesasne Reservation straddles the
border between the United States and Canada with territories
in Northern New York, Quebec and Cornwall Island, Ontario.
There is also a Mohawk reservation near Montreal and various
Iroquois territories throughout Ontario.
Mohawks maintain it is their aboriginal right to conduct trade
with other natives; prosecutors, though, have said there is
proof that most of the cigarettes ended up in regular
convenience stores off the reservations and were sold to
non-natives.
On Sept. 21, a Quebec Superior Court judge, citing insufficient
evidence, dismissed 28 tobacco smuggling-related charges
against Thompson.
``I think what is unique to this case is that it will ask the jury
on what degree are our courts put to use as an arbiter of
economic interests of another nation,'' said Stanley L. Cohen,
the Harts' attorney.
Cohen maintains Indians are exempt from having to file reports
of large cash transactions with the IRS. The Harts were
charged with money-laundering.
``They have to prove beyond reasonable doubt that the Harts
had criminal intent of not filling out the forms,'' he said. ``We
do not deny that they never filled out the reports. They don't
have to. It's a very pure and simple legal procedure.''
The St. Regis Mohawk Tribal Council denied U.S. Attorney
Thomas J. Maroney's requests for a meeting on the
reservation to discuss the charges against the Mohawk
defendants.
Though the judge refused to grant separate trials, guilty pleas
entered so far will have little to do with the Mohawk
defendants' cases, Cohen said. Jacobs's plea might implicate
Anthony Laughing, but it shouldn't implicate any of the other
Indian defendants.
Laughing, who hid out on the reservation for several months
last year, was arrested by state police Nov. 21 after a woman
tricked him into helping her outside a reservation restaurant.
He remains in the Onondaga County jail, Syracuse, without
bail.
In August, he survived triple-bypass heart surgery.
© Copyright 1998 Boston Globe Electronic Publishing, Inc.