RCMP lays criminal charges against Canadian tobacco company
TORONTO, Feb. 28 /CNW/
After a four and a half year criminal investigation into allegations of the Canadian tobacco industry's complicity in smuggling contraband tobacco products from the United States into Canada, the RCMP has laid six counts of Fraud and one count of Conspiracy to Commit Fraud and to Possess Proceeds of Crime against a major Canadian tobacco manufacturing company and a number of its' subsidiaries and current and former senior executives.
These charges are laid under Section 380 (1) (a) and Section 465 (1) (c) of the Criminal Code of Canada. The charges pertain to activities of the company, its affiliates, its senior officers and others involved in the smuggling of contraband Canadian blend tobacco products between 1991 and 1996 inclusive.
The companies charged are: JTI-MACDONALD, CORP., formerly known as RJR-Macdonald, Inc., Toronto, Ontario. R.J. REYNOLDS TOBACCO CO., (Delaware), USA. R.J. REYNOLDS TOBACCO INTERNATIONAL, INC., (Delaware), USA. NORTHERN BRANDS INTERNATIONAL, INC., (Delaware), USA.
These companies were all either affiliated companies or subsidiaries of R.J. R. Nabisco Holdings, Corp., (Delaware), USA during the time of the alleged offences. A series of mergers and restructuring resulted in the creation of a holding company now known as R.J. Reynolds Tobacco Holdings, Inc., (Delaware), USA.
Also charged are current and former employees of these companies. They are: EDWARD LANG of Naples, Florida - former member of the Board Of Directors of RJR-Macdonald, Inc. and former Senior Vice President of Manufacturing for R.J. Reynolds Tobacco Co.
DALE SISEL of Gillette, Wyoming - former President and Chief Executive Officer for R.J. Reynolds Tobacco International, Inc.
JAAP UITTENBOGAARD of Jupiter, Florida - former Chief Financial Officer and Vice President of Finance for R.J. Reynolds Tobacco International, Inc. and former Director of Northern Brands International, Inc.
PIERRE BRUNELLE of Geneva, Switzerland and the Province of Quebec former President and Chief Executive Officer of RJR-Macdonald, Inc. and former member of the Board of Directors of RJR- Macdonald, Inc.
PAUL NEUMANN of Geneva, Switzerland - former Vice President of Finance for RJR-Macdonald, Inc. and current employee of Japan Tobacco International, Geneva.
ROLAND KOSTANTOS of Geneva, Switzerland - former Chief Financial Officer for R.J. Reynolds Tobacco International, Inc. and former Vice President of Finance, Chief Financial Officer, and Vice President of Finance and Administration for RJR- Macdonald, Inc. Mr. Kostantos is a current employee of Japan Tobacco International, Geneva.
STANLEY SMITH of British Columbia - former Vice President of Sales for Canada for RJR-Macdonald, Inc.
PETER MacGREGOR of Atlanta, Georgia - former Manager of Finance and Administration for Northern Brands International, Inc.
Also identified in this indictment as an unindicted co-conspirator is LARRY MILLER of Las Vegas, Nevada and Messena, New York. Mr. Miller is currently serving seventeen and one-half years in the United States federal corrections system for smuggling-related offences and for conspiring to conduct financial transactions that defrauded the United States and Canada of tax revenue.
All accused have been summoned to appear in court at Old City Hall in Toronto, Courtroom 111 on Wednesday, March 26th, 2003.
The RCMP alleges that, between 1991 and 1996, the accused conspired together to commit fraud by agreeing to deal in Canadian blend cigarettes and fine-cut tobacco in a manner which fraudulently deprived the governments of Canada, Ontario and Quebec of more than $1.2 billion dollars in lost revenue through evaded federal excise duties and taxes and provincial tobacco taxes.
The RCMP also alleges that the revenue of RJR- Macdonald Inc. derived from the sale of Canadian blend tobacco products into the United States between 1991 and 1996 was a result of this fraudulent activity, and as such, this revenue is proceeds of crime.
The RCMP alleges that, between 1991 and 1996, the accused supplied the Canadian black market with Canadian blend tobacco products manufactured both in Canada and Puerto Rico, knowing that these products were being smuggled back into Canada and onto the commercial market. In addition, the RCMP alleges that the accused furthered this criminal activity by knowingly facilitating the flow of Canadian blend tobacco products to Canada through an affiliated company in the United States and third parties in the Caribbean in order to ensure a constant supply of the contraband to smuggling channels.
"As Canadian taxpayers, we all pay for corporate fraud," said Inspector Robert Davis, Officer in Charge of the RCMP Greater Toronto District Commercial Crime Section. "We pay in revenue losses that contribute towards our social welfare programs - programs that support our seniors, educate our children and take care of our ill and less fortunate."
To give you some idea of the impact, the more than $l.2 billion dollars in lost revenue identified during this investigation is enough money to buy two MRI machines for each and every public hospital in Ontario and Quebec. $1.2 billion dollars is also enough money to supply every high school student in Ontario and Quebec with new text books for one year."
"This investigation is part of the RCMP's on-going efforts to investigate allegations of impropriety by corporations operating in Canada," added Inspector Davis. "Large multi-national corporations will be held accountable for their criminal activity. Senior executives of those companies will not be allowed to hide behind a 'corporate veil' to protect themselves from criminal prosecution."
This investigation is on-going and the possibility exists that further charges will be laid.
ROYAL CANADIAN MOUNTED POLICE
For further information: Media Contact: Constable Howard Adams, RCMP Media Relations Officer "O" Division (Toronto), (905) 876-9674 (office), (416) 565-8012 (cell)