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Canadian Hells Angels and contraband tobacco

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The Center’s International Consortium of Investigative Journalists has taken heat lately for exposing the large-scale tobacco smuggling out of U.S. and Canadian Indian reservations. The Mohawk News Network called us “untruthful” for linking the Indian trade to “bikers and other gangs,” and concluded that “the Center serves Big Tobacco.” One angry blogger branded our stories “a precursor to genocide.”

Now comes word that Canadian police in Quebec this week have cracked down on what they are calling a major Hells Angels contraband tobacco and drug trafficking ring inside the Kahnawake Mohawk reserve near Montreal. About 60 police officers raided the bunker-like compound of Rice Mohawk Industries in an investigation code-named “Project Machine” and rounded up 46 people. Among those arrested were owner Peter Rice and his two sons Burton Rice and Peter Francis Rice. Also arrested was Salvatore Cazzetta, the reputed leader of the Montreal chapter of the Hells Angels.

Police say the Hells Angels used the Rice compound as a base for trafficking in contraband tobacco and crack cocaine. The men are charged with participating in a criminal organization that defrauded the Quebec and Canadian governments of millions of dollars in tobacco taxes. Cazzetta is also charged with drug trafficking.

In “Canada’s Boom in Smuggled Cigarettes,” ICIJ took readers inside a billion-dollar black market and revealed the close ties between Indian tobacco sellers and organized crime. As many as three out of every ten Canadian cigarettes are now sold on the black market, and seizures of contraband tobacco grew a striking 16-fold in Canada between 2001 and 2006. This latest raid is only one of a series of arrests carried out over the last few months involving Indian tobacco merchants and mobsters.

One Rice company is directly linked to the Hells Angels’ Cazzetta, a longtime outlaw biker with a history of drug trafficking convictions. Canadian federal corporation records show that Peter Rice is part owner with Cazzetta of Mustang Distribution Ltd., which manufactures an energy drink called Cintron. Cintron shares its Montreal offices with a company that produces a glossy teen magazine called Naked Eye. Its owner is Burton Rice.

Burton Rice also owns a tobacco manufacturing company called Fine Day Industries, according to federal corporation records.

Police found 11 safes in the high-security Rice compound. By noon Wednesday they had opened three and found large cash amounts in each of them. Montreal police, the Royal Canadian Mounted Police, the Mohawk police as well as the Quebec’s provincial police, the Sûreté du Quebec, all participated in the raid.