Cigarette defendant works for local law enforcement agency

One of the local residents named in a 58-count federal indictment alleging they supplied untaxed cigarettes to Coeur d’Alene tribal businesses works for a local law enforcement agency.

Problem is, none of the attorneys involved in the case, in which federal prosecutors are seeking $84 million from two Spokane wholesalers, would say Monday which agency employs 30-year-old Joseph D. Dunsmoor.

He appeared Monday in U.S. District Court along with the others named in the indictment. They are: L.A. Nelson Co., doing business as Burke’s Distributing, and its owners, Douglas E. Burke, 51, and Brandon E. Donahue, 34; and Black Sheep Distributing Inc., and its owner Brian T. Donahue, 30, all of Spokane.

The indictment, handed down last month, alleges that the Spokane wholesale companies sold at least 4 million cartons of untaxed cigarettes to the Coeur d’Alene smoke shops. Those businesses would in turn ship cigarettes to retail outlets in Washington, where they were sold to non-Indians at cheaper-than-retail prices.

The conspiracy between 1999 and 2003 cost the state of Washington an estimated $23 million in lost taxes.

“Allegations involving potentially unpaid Washington state cigarette taxes are taken seriously because those taxes go to help fund programs for things like health care, water quality and preventing youth violence, ” said Kenneth J. Hines, the IRS Special Agent in Charge for Washington.

Both Donahues, Burke and Dunsmoor all pleaded not guilty Monday before U.S. Magistrate Cynthia Imbrogno.

Christina L. Hunt, a federal public defender, represented Dunsmoor, who faces one count of conspiracy to traffic in contraband cigarettes. If convicted, Dunsmoor could face up to five years in federal prison and up to a $250,000 fine.

Hunt argued for and was granted a release from normal admonitions that would have prevented Dunsmoor from carrying his gun while he awaits trial. Hunt said he works both for a local sheriff’s office and the National Guard.

“As far as I’m concerned, as long as it is within the scope of employment, that’s OK,” Imbrogno ruled.

Asked later which law enforcement agency employs Dunsmoor, Hunt refused to say.

“He would prefer that his employer find out from him and not the newspaper,” Hunt said. Where Dunsmoor works “doesn’t have anything to do with the case,” she said.

Spokane County Sheriff’s spokesman detective David Thornburg and Kootenai County Sheriff’s spokesman Capt. Ben Wolfinger both said Dunsmoor doesn’t work for their agencies. An official at the Spokane County Civil Service Commission said the two employees who could say where Dunsmoor works were unavailable Monday to check.

According to the indictment, Dunsmoor delivered cigarettes to a location that was redacted from the record. “In those instances, Joseph D. Dunsmoor would unload the Washington retailer’s order from the Blacksheep Distributing Inc. truck directly to the Washington retailer’s vehicle.”

The new indictment is the latest development in a state and federal investigation that started with a series of raids on smoke shops on the Coeur d’Alene Indian Reservation in 2003.

Those raids led to guilty pleas from eight defendants involved in a conspiracy to smuggle millions of dollars of untaxed cigarettes to 12 locations on Washington state Indian reservations.

Spokane attorneys David Groesbeck and Carl Oreskovich are representing the wholesale distributors and their owners. Neither they nor their clients had any comment following the hearing Monday.