Oregon Department of Justice

Attorney General Hardy Myers today announced the conviction of the ex-mayor of Mill City, Oregon, for violations of the state's tobacco tax laws and other associated crimes. William "Bill" Downer, the owner and operator of Smokes 'N' Spirits in Mill City, was convicted yesterday on 30 separate felony counts in Marion County Circuit Court. Downer's crimes include Engaging in Business as Cigarette Wholesaler without a License, Engaging in Business as Tobacco Products Distributor without a License, Unlawful Distribution of Tobacco Products, money laundering and other related crimes.

The case was investigated by officials from the Tobacco Compliance Task Force, which includes the Oregon State Police, Oregon Department of Justice, and the Oregon Department of Revenue. Investigators found that Downer purchased tobacco products from Little Brown's Smoke Shack in Yakima, Washington. Little Brown's is not a licensed Oregon distributor and does not collect or pay Oregon tobacco tax. Consequently, Downer was required by Oregon law to report his purchases and pay the associated state taxes. Downer hid the fact that he was buying non-tax paid tobacco products from the Oregon Department of Revenue, the Oregon State Police, and his customers. Downer's customers were charged the full tax-paid price for tobacco products and, rather than pay the tax to the state, Downer pocketed the profit.

Downer also failed to obtain a license as a cigarette wholesaler and tobacco products distributor from the Oregon Department of Revenue, which is a class C felony in Oregon.

Sentencing is scheduled for July 27, 2005. Downer could be sentenced to 30 days jail on each of the counts. The state also will seek restitution of approximately $300,000 for unpaid taxes, interest and penalties.