Smuggled smokes cost man 3 years, $2.7M

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This article was published 11/12/2020 (1906 days ago), so information in it may no longer be current.

From the outside looking in, Maw and Paw Collectibles was the place to go for second-hand bargains. But Maw and Paw’s real stock in trade was smuggled cigarettes — lots of them, a Winnipeg court was told this week.

Paul Kettler, 52, pleaded guilty to three counts of possessing untaxed cigarettes and was sentenced Tuesday to three years in custody after he was busted in possession of more than two million untaxed cigarettes.

Kettler was also hit with a mandatory financial penalty of just over $2.7 million, equivalent to four times the taxes he evaded. The cigarette seizure was the largest in Manitoba at the time of Kettler’s arrest last February.

Kettler had been convicted of selling smuggled cigarettes from his three now-shuttered Winnipeg thrift shops in 2015 and was already before the court on similar charges out of Thompson at the time of his most recent arrest.

“I have no question in my mind you understood fully the seriousness of engaging in this type of behaviour,” provincial court Judge Cindy Sholdice told Kettler. “You knew full well that if you are going to go and sell cigarettes that you are going to get hit hard with a serious consequence.”

Court was told Kettler bought the untaxed cigarettes by the case in Ontario and Quebec and, with the aid of thrift shop employees, stored them at warehouses in Winnipeg and Headingley, before selling them out of his thrift stores.

“Basically, what we are dealing with here is someone who is involved on a vast, industrial scale, in cigarette trafficking, storing and selling,” said Crown attorney Sean Sass. “He is well organized, he has multiple employees involved… and he’s using a legitimate business as a cover.”

Kettler was released on bail Feb. 4, 2019, after police in Thompson arrested him in possession of 32,000 illegal cigarettes as well as pills and fentanyl. Just three weeks later, Manitoba Finance received a tip that Kettler had received a shipment of illegal cigarettes and was using his thrift shops to sell it, along with a variety of street drugs, including methamphetamine and crack.

Investigators placed Kettler under surveillance, and during a traffic stop on March 20, 2019, seized 35,000 cigarettes from his van. A search warrant executed at a Dufferin warehouse yielded another 208,000 cigarettes.

Kettler was on bail Feb. 13, 2020, when Manitoba Finance investigators and city police followed him to a Logan Avenue warehouse and seized two million untaxed cigarettes. Police later seized 180,000 cigarettes from one of Kettler’s thrift stores.

Kettler owned more businesses in Mexico and was “living pretty large,” said federal prosecutor Kevin Hawkins, noting Kettler had transferred large sums of money to Mexico and was found returning to Canada while on release with $13,000 in cash.

Selling untaxed cigarettes deprives Canada’s heath-care system of funds used to fight the very ailments cigarettes cause, Hawkins said.

“It shouldn’t be downplayed because it’s not fentanyl or cocaine,” he said. “Tobacco probably kills more people than any other drug in our country.”

Defence lawyer Mike Cook urged Sholdice to sentence Kettler to the equivalent of 15 months of time served, arguing he will be crippled by debt for the rest of his life.

“The (financial) penalties coming are mind-boggling,” Cook said. “If Mr. Kettler were selling guns or drugs, he would have a fixed sentence… he wouldn’t come out owing the province a couple million dollars.”

Kettler made a modest living with his thrift stores, and started trafficking in cigarettes on the advice of an acquaintance, Cook said. Even then, the cigarette profits, after expenses, were “quite small,” Cook said.

“We’ll never know exactly how much Mr. Kettler made, and I don’t think even Mr. Kettler knows,” Cook said.

dean.pritchard@freepress.mb.ca