Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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AG ANNOUNCES CONVICTION OF INEXPENSIVE SMOKES.COM OWNER FOR ILLEGAL DISTRIBUTION OF CIGARETTES AND OTHER LAW VIOLATIONS

August 17, 2005

Attorney General Hardy Myers today announced the conviction of Eric Ivan Guthrie, the owner and operator of inexpensivesmokes.com, an Oregon-based Internet cigarette retailer.  On Tuesday, August 16, a Washington County judge convicted Guthrie of cigarette distribution without a license, unlawful distribution of cigarettes, failure to comply with tobacco age verification and felon in possession of a firearm.  Guthrie was acquitted on charges of racketeering and computer crime.  Guthrie was sentenced to ten months in county jail.  The prosecution was the first of its kind in the nation.

Inexpensivesmokes.com, which is no longer in operation, offered name-brand cigarettes to consumers at approximately twenty dollars per carton. The cigarettes were shipped from Switzerland in single carton packages as part of an effort to avoid the imposition of federal and state taxes. 

In addition to violations of federal and state cigarette tax laws, inexpensivesmokes.com made no effort to verify the age of consumers and did not report Oregon sales to the Oregon Department of Revenue (DOR) as required by Oregon's Delivery Sales Act.  The Oregon-specific violations were confirmed by a series of undercover buys conducted by the Oregon State Police (OSP).  Those purchases included three supervised undercover purchases made by minors. 

Guthrie's prosecution was secured by the Tobacco Tax Compliance Task Force, a cooperative effort between the Oregon Department of Revenue (DOR), the Oregon State Police (OSP), and the Oregon Department of Justice (DOJ). 

In Oregon, all cigarette distributors are required to be licensed with DOR.  Distributors are also required to pay all state and federal taxes prior to reselling any tobacco product.  Oregon consumers who purchase untaxed cigarettes over the Internet or via phone order are responsible for self-reporting the purchase and paying state taxes. Additional information is available on the internet.

Contact:

Kevin Neely, Justice, (503) 378-6002
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