ROBERT STUBER, 60, of Lake Havasu City, Arizona, pleaded guilty today in U.S. District Court in Seattle to Conspiracy to Traffic in Contraband Cigarettes and Conspiracy to Launder Monetary Instruments in connection with a scheme to cheat the State of Washington of taxes owed on cigarettes. STUBER admits that between January 2005, and May 2007, his business, Cowlitz Candy & Tobacco Co., Inc., of Longview, Washington, sold more than a million cartons of contraband cigarettes to the Blue Stilly Smoke Shop near Arlington. Neither STUBER’s company, nor Blue Stilly paid the applicable state taxes on the cigarettes, which totaled more than $20 million. By not paying the taxes, both STUBER and the owners of the Blue Stilly retained larger profits for themselves. As part of his plea agreement, STUBER agrees to pay Washington State his share of $20,664,813 in tax revenue lost in the scheme.

Last November, three Stillaguamish Tribal members and a spouse of a Tribal member pleaded guilty to selling contraband cigarettes and avoiding $25 million in taxes at the Blue Stilly Smoke Shop. According to the facts admitted in today’s plea agreement, between January 2005, and May 2007, Cowlitz Candy & Tobacco Co., Inc was the primary supplier of cigarettes to the Blue Stilly Smoke Shop. STUBER conspired with the owners of the Blue Stilly, as well as three unnamed co-conspirators, to traffic in contraband cigarettes. The other conspirators were a cigarette broker in California, and cigarette distributors in New Mexico and California.

In late 2005, the Washington State Liquor Control Board notified Cowlitz Candy & Tobacco Co., Inc. that it was illegal to sell untaxed cigarettes to the Blue Stilly Smoke Shop. Cowlitz Candy & Tobacco had been selling the untaxed cigarettes to Blue Stilly, but repeatedly failed to record the sales on its books. After being put on notice about the illegal sales, Cowlitz Candy & Tobacco continued to sell the cigarettes to Blue Stilly but attempted to conceal the deliveries by going through other co-conspirators. The owners of the Blue Stilly would place orders with Cowlitz Candy & Tobacco, but the cigarettes would first be shipped to an Oregon warehouse controlled by two of the unnamed co-conspirators. The cigarettes were loaded into different trucks, and the invoices indicated the cigarettes were purchased from the New Mexico distributor. Evidence recovered when a search warrant was served on May 15, 2007, revealed that Cowlitz Candy & Tobacco sold Blue Stilly more than 1,052,751 cartons of contraband cigarettes on which no state tax was ever paid.

Cowlitz Candy & Tobacco was paid more than $17 million for the cigarettes, and STUBER sent more than a hundred checks totaling over $830,000 to his co-conspirators for their role in the scheme. STUBER is forfeiting more than four million cigarettes and more than $275,000 seized at the time of the searches in May 2007.

Edward Leverne Goodridge, Sr., 60, Linda Loy Goodridge, 59, and their son Edward Goodridge, Jr., 33, all of Arlington, Washington, and a cousin Sara Lee Schroedl, 40, of Lahaina Maui, Hawaii, all pleaded guilty to Conspiracy to Traffic in Contraband Cigarettes and Engaging in Monetary Transactions last November, and are scheduled to be sentenced on March 16, 2009.

Under the terms of the plea agreements, the government agrees to recommend no more than 18 months in prison for STUBER when he is sentenced by U.S. District Judge John C. Coughenour on May 15, 2009 at 9:00 a.m.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Internal Revenue Service Criminal Investigation (IRS-CI),and the Washington State Liquor Control Board. The case was prosecuted by Assistant United States Attorneys Mary K. Dimke, J. Tate London, and Richard E. Cohen.

For additional information, please contact Emily Langlie, Public Affairs Officer, United States Attorney’s Office, Western District of Washington at (206) 553-4110.

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