Kahnawake man acquitted on Quebec tax charge, prepares for constitutional challenge on federal charges

After nearly a week of deliberation, a jury has acquitted a Mohawk man from Kahnawake, Que., on charges of defrauding Quebec of $44 million in tobacco taxes.

Derek White, 48, was found not guilty on oneof the two fraud and conspiracy to commit fraud charges he was facing related to the largest Sret du Qubec operation targeting a cross-border contraband tobacco ring.

Sixtypeople were arrested in Operation Mygale on March 30, 2016, an investigation intoallegedtobacco smuggling from the United States and evasionof millions of dollars in taxes that should have been paid to the provincial and federal governments.White and Hunter Montour, also 48, were the only two being tried out of those charged.

The Crown argued White was the head of his own criminal organization that smuggled tobacco into Quebec without paying federal excise duties or Quebec taxes, and Montour was a member of that criminal organization.

On Monday, judge Sophie Bourque gave her final instructions to the jury regarding the rule of law that applies to evidence submitted by the Crown.They reached a verdict late Thursday afternoon.

"It's a victory for all," said White after the verdict was announced.

"We beat the Quebec government. It's a really big deal to all of us in the [tobacco] industry."

During the trial, White's lawyer Pierre L'cuyer argued there was no evidence any of the tobacco delivered to Kahnawake was eversold within Quebec and that the only evidence the Crown presented was that it was shipped to Six Nations, Ont.

Constitutional challenge

The jury, however, found White guilty of fraud,conspiracy to commit fraudand profiting from organized crime for not paying federal excise tax on the tobacco that was imported from the United States.Montourwas found guilty of aiding organized crime.

They have launched a constitutional challenge,arguing that Excise Tax Act on importsare not applicable to Mohawk people based on Sec. 35 Constitution Act rightsas well asthe United Nation's Declaration on the Rights of Indigenous Peoples and inherent rightsto tradetobacco tax-free.

In June 2018, JusticeMichel Pinnou, the case management judge,decided that the defendants would still have the right to invoke their constitutional rights as Mohawk people depending on the verdicts of the trial.

"Since some of the charges remain, the constitutional challenges still form part and parcel of their defence," said James O'Reilly, alawyerrepresenting White and Montourin the constitutional challenges.

Thoseproceedings are slated to begin Jan. 6 at the Palais de Justice Montrealand could have wider impacts on Mohawk peoples' involvement in the tobacco industry.

The Mohawk Council of Kahnawake said they're going to be paying close attention to the case.

"We congratulate the defendants on this victory no doubt it has been an exhausting and emotional few weeks," said the council's political press attachJoeDelaronde.

"Chief andCouncil will no doubt be examining yesterday's decision and will deliberate on this matter, as the constitutional challenge could have huge ramifications regardless of whether the judgment is in favour or against."