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Lawsuit claims alcohol wholesalers skipping on millions in taxes; DRT aware of problem, silent

By Troy Torres

troy@kanditnews.com



John Ryan, a private citizen and former communications director to then-Gov. Carl Gutierrez, sued alcohol distributor companies on behalf of the government of Guam for failing to pay alcohol taxes.


One of the lawsuits, which was filed November 6, 2019, claims Mr. Ryan "is concerned that the failure to pay alcohol taxes is costing the Territory millions of dollars each year."

The lawsuit, which provides invoices and receipts to prove Ryan's claims, states that he examined "actual receipts for alcohol" sold certain wholesalers and purchased by certain Guam retail stores and "came to the conclusion that the price being paid for the alcohol retail was in some cases lower than the tax per bottle that should have been paid."


In one example, Ryan shows wholesaler Permarch sold to Aguon's Store a bottle of Prince Alexis Vodka for $6, when the tax for that bottle is $8.32. Ryan provided several other examples with documented proof of one wholesaler that appears to have not paid tens of thousands of dollars in taxes.


In other cases, the lawsuit states, the retail price of the alcohol and the tax per bottle were so close "it could not possibly cover the wholesale cost unless the tax was not being paid."


Kandit contacted director of revenue and taxation Dafne Shimizu for a comment on the lawsuits. Ms. Shimizu replied she would respond later.


According to Ryan's lawsuit, he reported the tax evasion to DRT on September 17, 2019, and by the time of the lawsuit had not heard back from the agency or whether the matter was even under investigation. It is unknown whether DRT has since done anything to review Ryan's claims or to collect these taxes.


The Guam Legislature in December of that year - unable to continue trusting DRT's ability to properly assess and collect cigarette taxes - mandated through Public Law 35-129 the outsourcing of the Cigarette Tax Stamp Program. That program was created in the 34th Guam Legislature by then-Sen. Michael San Nicolas following cigarette and alcohol wholesaler MidPac's failure to pay cigarette taxes of at least $14.7 million over a three-year period. MidPac is owned by the Calvos.


The majority of these taxes that have been owed or evaded were supposed to be given to Guam Memorial Hospital for the resources, salaries of doctors and nurses, and medications needed to keep patients alive and well.

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