Saturday, August 19, 2000

Grand jury subpoenas RJR's foreign records




The Associated Press

        WINSTON-SALEM, N.C. — A federal grand jury is investigating export sales of the former international division of R.J. Reynolds Tobacco Co., the company said in a federal securities filing.

        The grand jury in Raleigh has issued subpoenas for documents, R.J. Reynolds said in documents filed with the U.S. Securities and Exchange Commission.

        The company said it was “aware of a grand jury investigation being conducted in North Carolina that relates to the cigarette business of RJR Tobacco and some of its former affiliates that were sold to Japan Tobacco Inc.”

        R.J. Reynolds said the federal subpoena was received July 7, 1999.

        Neither R.J. Reynolds nor the U.S. attorney's office would comment Friday on the probe.

        Federal investigators already had been looking into international cigarette smuggling to avoid taxes involving a Reynolds subsidiary, Northern Brands International.

        That probe began more than four years ago and has led to the conviction of one former executive, Les Thompson, who managed Northern Brands from the company's Winston-Salem headquarters.

        Mr. Thompson and Northern Brands pleaded guilty to charges related to smuggling cigarettes into Canada. Justice Department officials said they would continue investigating any possible role of RJR's leadership in cigarette-smuggling operations.

        Governments in the U.S. and Canada, which brought a $1 billion suit against RJR that was dismissed last month, have been unable to prove that any of RJR's senior managers engaged in illegal conduct.

        RJR has suggested Mr. Thompson acted alone in his smuggling activity.

        In March 1999, Mr. Thompson pleaded guilty in U.S. District Court in Syracuse, N.Y., to defrauding the Canadian government out of $72 million in taxes.

       



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- Grand jury subpoenas RJR's foreign records
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