At 7 a.m. on Tuesday, June 10, 2003, the Oregon Tobacco Compliance Task Force began the execution of search warrants at over 30 locations throughout Oregon for evidence of the illegal distribution and sale of counterfeit and untaxed tobacco products by Willamette Valley Distributing, Inc., one of Oregon's largest distributors of cigarettes.
Judicially authorized search warrants were executed on various business locations and warehouses of Willamette Valley Distributing, located in Oregon City and Springfield, and the Tobacco Outlet in Gresham. Both Willamette Valley Distributing and the Tobacco Outlet are owned and operated by Michael Miller of Oregon City, Oregon. Over 66 law enforcement personnel participated in execution of the warrants, resulting in the seizure of contraband cigarettes and numerous business records. Search warrants are also being executed at retail tobacco outlets throughout Oregon.
Distributors of cigarettes are required to pay for, and affix an Oregon tobacco tax stamp to each pack of cigarettes. The illegal sale of unstamped cigarettes results in increased revenue for the distributor and decreased tax revenue for the State of Oregon. Counterfeit cigarettes are those which have the packaging of a particular brand, and thus can be sold for a higher retail price, but were manufactured and packaged by another entity.
The Tobacco Compliance Task Force was created by the 2001 Oregon Legislature to enforce the laws of Oregon related to tobacco products and to ensure that all taxes on tobacco products are paid. The Task Force includes the Oregon Department of Revenue, the Oregon State Police, and the Oregon Department of Justice, working in conjunction with its federal partners. Assisting in execution of the warrants are the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the Bureau of Immigration and Customs Enforcement, the Internal Revenue Service, the Oregon City Police Department, and the Gresham Police Department.
During the 2001 legislature, analysts estimated that the State of Oregon loses over $10 million a biennium to cigarette tax evasion and other violations of state and federal tax laws. Estimates by industry representatives place the estimated losses as high as $100 million annually. Since the creation of the Task Force, Oregonians passed Ballot Measure 20, which imposed an additional 60 cent per pack levy on cigarettes. Oregon currently has the 6th highest U.S. tax at $1.28 per pack.
Kevin Neely, Justice, (503) 378-6002