UPDATE: Cigarette tax hearings complete, judge reserves decision

By: The Citizen staff report

Friday, February 13, 2009 3:42 PM EST

After an hour and a half of listening to arguments, a state Supreme Court judge overseeing a felony cigarette tax evasion case against the Cayuga Indian Nation of New York said he will hold off issuing a decision until next week.
Lawyers for the nation want the district attorneys in Cayuga and Seneca counties to return 3.5 million untaxed cigarettes, as well as computers and documents that were seized when their Lake Side Trading stores were raided on Nov. 25. The district attorneys want the nation to stop selling untaxed cigarettes until an appellate court decides on the legality of those raids and the overall investigation.

Judge Kenneth Fisher, who signed the warrants for the raid, said he will issue a written decision on these latest motions after he reviews both arguments.

After publicly admitting that there is a sealed grand jury indictment pending against the Cayuga Nation, Cayuga County District Attorney Jon Budelmann said it will be detrimental to his case if he is forced to return all the evidence.

"The jury is entitled to see and examine the evidence if it goes to trial," Budelmann said. "And it's unfair because unexpected things happen at trials."

Details about the indictment or what it contains were not available.

Although that indictment was issued on Dec. 10, an injunction issued by an appellate court has prevented those charges from being officially filed against the nation. The injunction also prevents the district attorneys in both counties from raiding the nation's stores in Union Springs and Seneca Falls again, from seeking any new charges against the nation. It also gave the nation the right to request the return of the evidence.

The injunction will remain in effect until the appeals the court, which is the state Appellate Division out of Rochester, has a chance to reveal the nation's appeal of Fisher's Dec. 9 decision, when he ruled that the tribe does not have a recognized reservation according to New York state's tax laws, that the raids were legal and that the district attorneys in both counties could pursue felony tax evasion charges.

A decision on the appeal is not expected until the end of May.

Lee Alcott, an attorney for the nation, said the Appellate Division's injunction could be an indication on its stance about Fisher's decision, and said there was no reason for the district attorneys to hold onto the evidence.

"This order is a shot to the heart of the prosecution," Alcott said. "If this continues to go the way it looks like it's going to go, this prosecution is over."

For more coverage from Friday's proceedings, see Saturday's edition of The Citizen.

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