Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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Myers Announces Indictment/Arrest Of Cigarette 'Grey Marketers'

January 31, 2003

Attorney General Hardy Myers today announced the indictment and arrest of two individuals by the Tobacco Compliance Task Force. The Task Force, a joint effort between the Oregon State Police, the Department of Revenue, and the Department of Justice, was established by the 2001 Legislature to investigate and prosecute individuals and organizations engaged in tobacco tax evasion, distribution of counterfeit tobacco products, and other tobacco related crime.

Indicted in Marion County Court on charges of racketeering, unlawful distribution of cigarettes and making false reports regarding cigarette taxes were Francisco Osegueda, Nicolasa Osegueda and their business, United Trading Company. The Task Force alleges that the Oseguedas and their company imported hundreds cartons of "grey market" cigarettes or unstamped and untaxed cigarettes. "Grey market" cigarettes are those that are produced outside the U.S. for consumption only outside the U.S., or cigarettes produced inside the U.S. intended for consumption outside the U.S. These cigarettes do not meet the stringent state and federal labeling laws.

The Department of Revenue estimates that over $10 million dollars in revenue is lost annually to illegal distribution and sales of unstamped and grey market tobacco sales.

"Most of us pay our fair share in taxes," Myers said in announcing the arrest. "When someone seeks to evade their share, we must hold them accountable."

Today's arrests are the first by the members of the Task Force. The future of the Task Force is in doubt due to budget cuts to the participating state agencies.


Kevin Neely, Justice, (503) 378-6002
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