A 67 year old South Carolina tobacco broker has been convicted in connection with cigarette smuggling on the Akwesasne Indian Reservation.
William David Humphries was found guilty Friday in federal court on 44 felony counts, including interstate travel in aid of racketeering, a wire fraud conspiracy to defraud Canada of tax revenue, a conspiracy for the unlicensed manufacture of tobacco products and concealment money laundering.
Between 2005 and 2006, Humphries conspired with other people living on the Akwesasne Indian Reservation to defraud Canada of tax revenue.
In 2005, he began working with a major manufacturer of cigarettes that was operating on the reservation without the federally required bond and permit.
Humphries provided "Canadian Blend" cut-rag tobacco and cigarette-making supplies to the unlicensed manufacturer.
This tobacco was manufactured into cigarettes and subsequently smuggled into Canada without the payment of any legally required taxes to Canada.
Between the summer of 2005 and May 2006, Humphries supplied the unlicensed manufacturer with approximately one load of cut-rag tobacco per week.
He supplied approximately 44 loads of tobacco, with each load producing 13,200,000 contraband cigarettes, causing a significant tax loss to Canada.
The unlicensed manufacturer was also engaged in a conspiracy to distribute marijuana smuggled in from Canada and then distributed throughout the United States.
The proceeds of that marijuana distribution were used to fund the cigarette smuggling conspiracy, which employed the same smuggling routes used to bring marijuana into the United States from Canada.
In February 2006, after delivering a load of tobacco to the unlicensed manufacturer on the reservation, Humphries was stopped for a vehicle infraction.
Law enforcement officers seized approximately $88,000 in U.S. currency paid to Humphries for the sale of tobacco.
A narcotics detection canine alerted to the currency, and officers were able to smell marijuana on the money.
At trial, witness testimony established that the money found on Humphries was the proceeds of marijuana distribution.
In May 2006, the unlicensed manufacturers dealing with Humphries were arrested on federal marijuana charges and later cooperated with the government.
However, Humphries continued to sell tobacco and cigarette-making supplies to other unlicensed cigarette manufacturers based on the reservation.
Humphries continued to receive payments in the form of proceeds of marijuana sales from unlicensed manufacturers to which he had sold Canadian blend tobacco and supplies.
In an attempt to disguise the source of the money, Humphries began taking substantial sums of U.S. currency to the Mohawk Bingo Palace, located on the reservation.
In recorded conversations heard by the jury with one of the government informants, he explained that he was inserting large sums of currency into the electronic bingo machines and then repeatedly cashing out at the cashiers' window in an attempt to remove the smell of marijuana from the money.