Cigarette Trafficker to Face RICO Sentencing

     (CN) – A man who made more than $138 million selling untaxed cigarettes meant for Native Americans should have been sentenced for a racketeering conspiring to violate a federal trafficking law.



     From 1999 to 2004, Rodney Morrison sold more than $138 million in untaxed cigarettes at the Peace Pipe Smoke Shop on the Unkechauge Indian Nation’s Poospatuck Indian Reservation, in Mastic, N.Y.
     Morrison knew that at least some of his big customers, who bought at least 60,000 cigarettes in one transaction, resold the smokes off the reservation.
     In 2006, federal prosecutors identified Morrison as the leader of a racketeering enterprise and charged him with violating the Contraband Cigarette Trafficking Act.
     A jury ultimately convicted Morrison of one count of unlawful possession of a firearm as a convicted felon, as well as one count of RICO conspiracy to violate the federal contraband act.
     U.S. District Judge Denis Hurley later threw out the RICO conviction after finding that New York Tax Law, which defines state violations of the federal contraband law, was unconstitutionally vague.
     Pointing out that the 2nd Circuit had certified certain questions on New York tax law to the state appeals court in City of New York v. Golden Feather Smoke Shop, Hurley said Morrison did not have sufficient notice that his conduct was illegal because Section 471 of the statute regarding on-reservation cigarette sales was “unsettled and ambiguous.”
     After the court sentenced Morrison to 10 years in prison, plus a $75,000 fine, for the weapons charge, both the government and Morrison appealed to the 2nd Circuit.
     A three-judge panel of the Manhattan-based court rejected Morrison’s claims and reinstated the RICO conviction on Monday, finding that Hurley had misinterpreted its precedent.
     “Indeed, far from suggesting that ‘the circuit perceive[d] the applicability of § 471 to on-reservation sales as unsettled and ambiguous, … Golden Feather II demonstrated our court’s strong sense that the plain language of Section 471 gave the state of New York the power to prosecute cigarette vendors for the on-reservation sale of unstamped cigarettes to non-tribal members,” Judge Guido Calabresi wrote for the panel.
     “In deferring to the Court of Appeals, our court did not suggest that the question of Section 471’s applicability to on reservation sales was either vague or hard to resolve,” Calabresi added. “Indeed, as noted earlier, we indicated that we were quite capable of ruling on the issue should the New York Court of Appeals decline to accept certification. Our certification simply acknowledged that the New York Court of Appeals, being the ultimate arbiter of New York law, is the optimal body to settle state law questions, particularly when these questions are of high political significance within the state.”
     Though Morrison argued that New York’s restraint from collecting taxes on Native American cigarette sales barred his conviction under the contraband act, the appellate panel found that the argument confused the law as written and the law as it is enforced.
     Rulings from the 9th Circuit and the Western District of Washington “reinforce our own conclusion that the normal meaning of ‘required,’ as contained in the CCTA, is what is mandated by the state statute, and not what is enforced by the state executive,” Calabresi wrote.
     Even if the forbearance policy created some ambiguity for Native American retailers about tax collection for on-reservation sales, “Morrison’s actions went far beyond the sort of conduct that might be in any area of ambiguity,” the decision states.
     Morrison’s $138 million wholesale business to 50,000 off-reservation customers constituted “large-scale cigarette bootlegging,” a type of “core conduct” criminalized under New York tax law, court found.
     Morrison now faces resentencing for the RICO conviction.

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