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Tobacco tax-case figure freed: He is released on $100,000 bond in the case, which alleges fraud and conspiracy.
[October 21, 2008]

Tobacco tax-case figure freed: He is released on $100,000 bond in the case, which alleges fraud and conspiracy.


(Tulsa World (OK) Via Acquire Media NewsEdge) Oct. 21--A tobacco wholesaler was released on bond Friday in connection with allegations that he masterminded a $25 million scheme to defraud Oklahoma and its Indian tribes out of tax revenues.



Gary Lester Hall, 66, was released on a $100,000 recognizance bond, said Dan Monnat, Hall's attorney in Wichita, Kan.

Hall and seven other people were charged Wednesday in a 43-count indictment in U.S. District Court in Kansas.


They are accused of conspiracy to divert cigarettes, money laundering, mail fraud, wire fraud (cigarette orders), wire fraud (money transfer), interstate transportation in aid of racketeering, and violation of the Contraband Cigarette Trafficking Act.

Monnat said Hall looks forward to clearing his name in court.

"Gary Hall is a well-respected businessman and philanthropist from southeast Kansas, and he insists he is innocent, and he welcomes a jury trial that will establish that fact," Monnat said.

Hall owns several businesses, including Sunflower Supply Co. of Galena, Kan. It is licensed by the Oklahoma Tax Commission to do business in Oklahoma as a tobacco wholesaler.

The

other defendants are Jeremy Wayne Hooker, 33, of Salina, Okla.; Thomas Anthony Grantham, 50, of Joplin, Mo.; Keith Dion Noe, 42, of Joplin; Justin Boyes, 32, of Galena, Kan.; Danny Ray Davis, 62, of Galena; James William Coble, 35, of Galena; and Justice Michael Berry, 36, of Joplin.

Also named as defendants are three businesses -- Sunflower Supply Co., Discount Tobacco Warehouse Inc. and Rebel Industries Inc.

Jim Cross, a spokesman for acting U.S. Attorney Marietta Parker, said all of the defendants except Hooker were arrested Friday and released on bond.

Hooker appeared in U.S. District Court in Wichita on Monday and was released on bond then, Cross said.

Monnat said Sunflower Supply Co. conducted business on Monday and remains open.

The arrests and indictments come three years after the Tulsa World began investigating the methods and delivery route used by Hall's companies to ship low-tax cigarettes to Tulsa-area smoke shops licensed by the Creek, Osage and Cherokee nations.

Since 2005, the World has purchased low-tax cigarettes at about 20 smoke shops that should be selling cigarettes with a 77-cent or 86-cent tax stamp.

The World's investigation showed how low-tax cigarettes sold along the Oklahoma border by Indian smoke shops were being shipped into the Tulsa area, a high-tax zone.

Low-tax cigarettes bear a 6-cent tax stamp and by law can be sold only along the Oklahoma border by smoke shops in competition with low-tax states. The Tulsa tax rate is $1.03 per pack.

Cherokee-affiliated stores have stopped selling low-tax cigarettes in the Tulsa area in recent months after an arbitration ruling deemed such sales to be improper.

Omer Gillham 581-8301

[email protected]

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Copyright (c) 2008, Tulsa World, Okla.
Distributed by McClatchy-Tribune Information Services.
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