SEATTLE — A tobacco products distributor in New Mexico has been sentenced to 18 months in prison for his role in a contraband cigarette conspiracy that involved the Blue Stilly Smoke Shop in Arlington.
A U.S. District judge also sentence Matthew M. Cunningham to three years of supervised release and ordered him to pay $21,545,000 in restitution for his role in a scheme to sell untaxed cigarettes to Blue Stilly.
Cunningham was part of a scheme with Blue Stilly operators and the owner of Cowlitz Candy & Tobacco of Longview, Wash., to ship more than 1 million cartons of untaxed cigarettes to the Arlington smoke shop.
Conspirators created false invoices to avoid having to pay $20 million in cigarette taxes, according to U.S. Attorney’s Office officials.
During the operation, Cunningham’s company, MRC Enterprises LLC, was reimbursed for shipping expenses and paid an additional $500 for every shipment of cigarettes shipped under the MRC name, officials said.
Paperwork was falsified to make it appear as though the cigarettes were purchased from MRC.
According to his plea agreement, Cunningham admitted that after search warrants were served to Blue Stilly in May 2007, he continued to sell untaxed cigarettes to the smoke shop.
Those continued sales resulted in a more than $3 million loss in taxes to Washington state, the U.S. Attorney’s Office said.
Cunningham also sold approximately 6,000 cartons of contraband cigarettes to The Trading Post at March Point on the Swinomish Indian Reservation near Anacortes, which resulted in a tax loss of more than $120,000, officials said.
Cunningham’s sentencing is the latest in a string of prison terms handed out.
Those conspirators include the former owners of Blue Stilly — Edward L. Goodridge Sr., 60, Edward Goodridge Jr., 33 and Sara L. Schroedl, 40.
All three individuals were sentenced to various prison terms and supervised release.
United States District Judge John C. Coughenour sentenced Cunningham.
The cases were investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Internal Revenue Service Criminal Investigations and the Washington State Liquor Control Board.
The cases are being prosecuted by assistant U.S. attorneys Mary K. Dimke, Richard E. Cohen and J. Tate London.
