The Cayuga Nation and prosecutors from Cayuga and Seneca counties will return to court today to settle a new wave of motions regarding an ongoing felony cigarette tax evasion case against the tribe.

The Cayuga Nation will seek the return of its cigarettes and computers while Cayuga and Seneca counties will request a court order to close down the tribe's businesses until after an appeals court has a chance to decide whether or not the nation can be charged with tax evasion.

The charges stem from the Nov. 25 raids that seized 3.5 million untaxed cigarettes from the nation's Lake Side Trading stores in Union Springs and Seneca Falls. State Supreme Court Judge Kenneth Fisher, who approved the original search warrant and later denied the Cayugas' motion to have the investigation halted, will preside over today's proceedings.

Lee Alcott, an attorney for the nation, said if the cigarettes, which are considered a perishable item, and other evidence are not returned to the tribe, the nation will sue the county for $500,000 to replace their lost merchandise.

“The nation in filing these arguments, is attempting to insulate the counties from a liability that exists if those cigarettes expire,” Alcott said. “This will not prevent the counties' rights to continue to prosecute the cases if it's granted. We've never denied the possession of untaxed cigarettes. There is no purpose in continuing to hold them.”

The tribe, along with other Indian nations in New York, have claimed they are exempt from collecting sales and excise taxes on transactions made on their property because their businesses are protected by their sovereign nation status.

Despite the threat of an additional lawsuit, Cayuga County District Attorney Jon Budelmann said he does not see any legal basis for returning the property.

With police agencies constantly seizing cars, computers and other items that depreciate in value over time, Budelmann said defendants usually have to prove that the agencies violated the law by keeping the evidence.

In the event that the county does lose a lawsuit and is forced to pay the $500,000, Budelmann said the payment would be covered by a $1,000 insurance policy.

“They have already sued us,” Budelmann said, referring to a current injunction the tribe secured that prevents the investigation from proceeding. “They are victims of their own acts. They stopped us from proceeding forward with the prosecution. We would be halfway done right now if they didn't stop it.”

On Jan. 21, the state Appellate Division issued an injunction against the counties, preventing them from continuing their tax evasion investigations until after the court handles the tribe's pending appeal against Fisher's Dec. 9 decision that had allowed the counties to move forward. That appeal is not expected to be heard until late May.

In his earlier written decision, Fisher said the Cayuga Nation 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.

In the second motion that was filed with Fisher, Budelmann said he will request the judge to order the nation to close its two stores until the appellate division handles the appeal.

The two stores re-opened for businesses on Jan. 30 a little more than a week after the appellate court issued the injunction.

“I was stunned when they re-opened,” Budelmann said. “They are blatantly violating the law. What does it mean when one group of people can just violate a court decision while another group has to follow it?”

Staff writer Nate Robson can be reached at 253-5311 ext. 248 or nathan.robson@lee.net