Tobacco wholesale company sued for failure to pay $18.4 million
By Michael Beebe

Federal attorneys have filed suit against a tobacco wholesale company owned by Arthur “Sugar” Montour, a former Seneca tribal councillor, for failing to pay $18.4 million in federal tobacco settlement assessments.

Montour’s company, Native Wholesale Supply Co., located on the Cattaraugus Reservation, is the exclusive American distributor for Seneca and Opal brand cigarettes manufactured in Canada by Grand River Enterprises, a Native American company.

Justice Department attorneys representing the U. S. Department of Agriculture allege that Native Wholesale Supply has failed to pay federal assessments for 2006 through 2008, as required under the tobacco master settlement agreement.

Native Wholesale Supply is closed through Jan. 5. Its New York City attorney did not return a call.

Seneca brand cigarettes are one of the best-selling Native American brands, and Grand River Enterprises has faced legal action by 30 state attorneys general, alleging the company has skirted requirements to comply with the agreement reached with the major U. S. tobacco companies.

Grand River, in turn, has filed a lawsuit against the state attorneys general in U. S. District Court in the Southern District of New York, as well as an action against the United States in an international tribunal, claiming damages under the North American Free Trade Agreement.

To learn the sales figures for Seneca brand cigarettes, the state attorneys general filed suit in U. S. District Court in Buffalo, trying to force Native Wholesale to divulge its cigarette purchases.

U. S. District Judge Richard J. Arcara agreed with the states on Nov. 20, ordering Native Wholesale to turn over its sales figures. Native Wholesale has appealed the order.

The separate lawsuit seeking payments from Native Wholesale Supply said it was incorporated under the laws of the Sac and Fox Indian Nations and has its principal address at 10955 Logan Road, Perrysburg.

Wendy M. Ertmer, a trial attorney with the Justice Department, said in the suit that Native Wholesale partially paid its 2005 assessment but since then has not paid anything or complied with reporting requirements since January 2007.

“As of its Sept. 1, 2008, statement,” the suit alleges, “[National Wholesale Supply’s] outstanding balance, with late payment interest, was $18,451,475.96.”

The lawsuit demands that Native Wholesale pay the owed amount and provide the government the information required by the settlement act.

Federal agents in 2004, at a time when Montour was a Seneca councillor, seized 90,000 cartons of his cigarettes under the federal Cigarette Contraband Trafficking Act.