CIGARETTES, VEHICLES SEIZED

The crackdown targets smoke shops refusing to pay state taxes.

Federal agents seized hundreds of cartons of cigarettes, three vehicles and
two assault rifles Thursday during a raid on two tribal smoke shops in
northern Oklahoma and two distributors in Kansas as part of a ongoing
crackdown on the sale of contraband tobacco products.

Steve Steele, spokesman for the U.S. Bureau of Alcohol, Tobacco and
Firearms, said one person was arrested for possessing the two assault
weapons after being convicted of a felony.

That case will turned over to the U.S. Attorney's Office, Steele said.

He said the seizures were the culmination of a two-year investigation into
smoke shops that continued to sell cigarettes to nontribal members without
paying state taxes.

That investigation, Steele said, showed a ma jority of their customers were
non-Indians.

Tribal businesses must pay state taxes on all sales to customers who do not
belong to a tribe.

Steele said the seizures were conducted by 40 ATF agents with backup from
the Oklahoma High Patrol.

He listed the targets as Buddy's Smoke Shop outside Ponca City, State Line
Smoke Shop near Newkirk, Cimarron Enterprises Office in Wichita, Kan., C &
J Distribution in El Dorado, Kan., as well as a couple of private residences.

Officials with the Oklahoma Tax Commission asked for the federal agency's
assistance in the investigation because the smoke shops are located on
trust land, Steele said.

State officials have no jurisdiction over such businesses.

Steele said the smoke shops, even after being warned that they were
operating outside the law, continued to evade state taxes by buying the
cigarettes from Kansas distributors.

He said 315 cartons of contraband cigarettes were seized during the raids
along with two vehicles and a tractor believed to be used in transporting
the products.

Even though the seizures involved so many agents, Steele said he would not
describe them as ``raids,'' adding they were ``low-key'' contacts in which
the agents walked in, identified themselves and presented their search
warrants.

Rep. Ernest Istook, R-Okla., a vocal critic of tribes who do not comply
with Oklahoma tax laws, applauded the crackdown.

He said the state reportedly loses $27 million annually because smoke shops
refuse to pay taxes on cigarettes sales.

Federal law bars possession of more than 60,000 cigarettes unless state
taxes have been paid.

Istook has played a key role in providing federal funds to help end the
practice.

``Cracking down on large-scale tax evasion saves millions of dollars for
honest taxpayers,'' he said. ``Otherwise, the rest of us have to make up
the difference to pay for roads, schools, public health and safety.''

Jim Myers can be reached at (202) 484-1424.

Checked-by: Mike Gogulski