A couple from Plummer, Idaho, agreed to forfeit $1.4 million in cash to the U.S. government as they pleaded guilty Tuesday in U.S. District Court in Spokane to interstate trafficking in contraband cigarettes.
Peter and Peggy Mahoney, who operated the Warpath Smoke Shop in Plummer, entered their guilty pleas before U.S. District Court Judge Robert Whaley. He scheduled sentencing for April 19.
The cash was part of $3.1 million in cash and $2 million in bank accounts seized by a task force of federal and state agents who investigated the interstate smuggling of untaxed cigarettes, said U.S. Attorney Jim McDevitt.
The sale of smuggled, untaxed cigarettes has resulted in the loss of hundreds of millions of dollars in tax revenue to the state of Washington, the U.S. attorney said.
Idaho is a major source for untaxed cigarettes that are smuggled into other states and frequently sold at retail stores on Indian reservations, McDevitt said.
Peter Mahoney, 53, pleaded guilty to conspiracy to traffic in contraband cigarettes and money laundering.
His wife, Peggy Mahoney, 38, pleaded guilty to one count of contraband cigarette trafficking.
They were among five people indicted in September 2004. A companion racketeering indictment, involving some of the same defendants, was returned in August 2005.
Co-defendants Mark Van’t Hul, 43, of Worley, Idaho; Lyle W. Conway, 69, of Fife, Wash.; and Lyle Shawn Conway, 32, of Tacoma, were named in the 2004 indictment. They previously pleaded guilty and are awaiting sentencing, said First Assistant U.S. Attorney Thomas Rice.
The Warpath Smoke Shop sold wholesale cigarettes to Washington Indian retailers without reporting those sales to Washington state or paying a required state cigarette tax, Rice said.
Lyle W. Conway and Lyle Shawn Conway also have pleaded guilty in the companion criminal case filed in August 2005 alleging that they and six other people engaged in a racketeering scheme involving the sales and interstate shipment of cigarettes.
Kathleen Mahoney, of Plummer, and Gerald G. George, of Tacoma, also have entered guilty pleas in the racketeering case.
Still awaiting trial in that case are Louie Mahoney, 57, Christine Mahoney-Meyer, 53, and Margaret R. Jose, 60, all of Plummer; and Roger Flander, 67, of Wapato, Wash., Rice said.