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Former operators of Blue Stilly Smoke Shop sentenced

ISLAND CROSSING — As a remodel of the Blue Stilly Smoke Shop continues, its former owner/operators are heading to prison.

Edward L. Goodridge Sr., 60, Linda L. Goodridge, 59, Edward L. Goodridge Jr., 33, and Sara L. Milliron Schroedl, 40, were sentenced March 16 for trafficking more than $55,000,000 worth of contraband cigarettes in the state of Washington.

Edward L. Goodridge Sr., Edward L. Goodridge Jr., 33, and Sara L. Milliron Schroedl were on the Stillaguamish Tribal Council when they set up a corporation to run the Blue Stilly Smoke Shop for their own personal profit.

Goodridge Sr. and Jr. were each sentenced to 14 months in prison and two years of supervised release. Schroedl was sentenced to eight months in prison and two years of supervised release.

Linda Goodridge, the wife of Ed Sr., was sentenced to two years of supervised release, four months of home confinement with electronic monitoring and 200 hours of community service. Both Schroedl and Goodridge Jr. also have to perform 200 hours of community service following their prison sentences.

All four are responsible for $25,706,331 in restitution.

The defendants deprived the state of more than $25,000,000 of tax revenue by refusing to pay cigarette taxes according to court papers.

Investigating agencies were the IRS Criminal Investigation, the ATF (Alcohol, Tobacco and Firearms) and the Washington State Liquor Control Board, said Special Agent Daniel Wardlaw, of IRS Criminal Investigations in the Seattle Field Office.

In imposing the prison time, U.S. District Judge James L. Robart said he did not think it was enough for the defendants to simply pay back the money they had illegally gained in the scheme. Robart said he was struck by what he read in a letter from a member of the Stillaguamish Tribe that the Goodridges were driving around in expensive cars, while other tribal members were sleeping in theirs.

“It could not have been lost on these defendants that they were reaping benefits that were disproportionate,” Judge Robart said.

Evidence gathered from the searches of Blue Stilly and various cigarette suppliers revealed that between March 2003 and May 2007, Blue Stilly had ordered and illegally sold in excess of 1.8 million cartons of cigarettes and generated more than $55 million in revenues. The four conspirators personally profited $15 million by not paying taxes and used the profits for their own benefit.

History of the case

The defendants owned and operated the smoke shop from March 2003 to April 2008 on Stillaguamish Tribal Land, a.k.a. the triangle at Island Crossing.

Three of the defendants held powerful positions within the Stillaguamish Tribe. Goodridge Sr. served as the Chairman of Tribe from 1997 to 2004. Goodridge Jr. served as an executive director from 2002 until November 2008. Schroedl was employed in various capacities by the Stillaguamish Tribe. Most significantly from 2000 to 2002, she served as the co-executive director of the Tribe, from 2002 to 2005 and she served as the deputy CEO of the Stillaguamish Economic Corporation.

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Washington state settled a controversial dispute with Indian tribes in 2001 regarding the sales of cigarettes to nontribal members. The Goodridges refused to enter a compact with the state of Washington to pay taxes on cigarette sales.

At that time, a smoke shop called Stilly’s Trading Post was operated by a non-tribal member who leased the land from the Stillaguamish Tribe. In 2001, law enforcement officers seized contraband cigarettes from non-tribal members who bought them on the Stillaguamish reservation.

In March 2003, the Tribal Board of Directors including Goodridge Sr., Goodridge Jr., and Schroedl, voted to remove the private operator from running Stilly’s Trading Post.

The three then formed a limited liability corporation, Native American Ventures, LLC, (NAV) each taking 33 percent interest. NAV then secured a lease from the Stillaguamish Tribe, acquired new inventory and operated under the new name, Blue Stilly Smoke Shop.

“The defendants were less than candid with members of the Stillaguamish Tribe about the fact that they were personally operating and profiting from the Smoke Shop,” court papers said.

From March 2003 until May of 2007, they purchased 1,813,004 cartons of contraband cigarette from both out of state and Washington licensed wholesalers. They sold the cigarettes to the public without affixing a Washington state tax stamp or collecting state cigarette taxes.

Blue Stilly profits to the amount of $15 million were deposited in a NAV Frontier Bank account and then distributed to accounts controlled by the defendants, each corporation receiving more than $5 million.

On May 15, 2007 federal law enforcement officers raided the Smoke Shop and seized about 3,577,220 cigarettes and $46,495 in cash. Two days later, May 17, 2007, the defendants reopened the Smoke Shop, restocking with cigarettes that the defendants continued to sell without tax stamps or paying the state cigarette taxes. They continued to sell cigarettes illegally until April 2008, when the Blue Stilly Smoke Shop finally entered a Cigarette Tax Compact with the state of Washington.

On Nov. 20, 2008, each of the defendants pleaded guilty to conspiracy to traffic contraband cigarettes and to one count of “monetary transaction of property derived from unlawful activity” (money laundering).

The United States recommended a sentence of 18 months of imprisonment, followed by three years of supervised release for Edward Goodridge Sr. and Edward Goodridge Jr., and recommends a sentence of 12 months of imprisonment, followed by three years of supervised release for Linda Goodridge and Sara Schroedl.

The current Tribal Chairman Sean Yanity submitted a victim impact statement on behalf of the Stillaguamish Tribal Board of Directors, detailing the damage the crimes of these defendants has done to the Tribe, both financially and nonfinancial in nature, especially personal relationships, court papers say.

Yanity noted in his statement the devastating loss of revenues that would have been available for social services to Tribal members.

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