WASHINGTON Several tire distributors across the U.S., including a subsidiary of Yokohama Tire Corp., are part of an investigation by the federal government for alleged ``gray market'' truck tire sales which defraud the Internal Revenue Service of revenue. The government is working ``feverishly'' on the case and will decide whether to issue indictments against the companies ``as quickly as we can analyze the information,'' said Karl Oroz, branch chief of the criminal investigation division of the U.S. Attorney's office in Atlanta.
Meanwhile, a Yokohama spokeswoman said her company's subsidiary, Friend Tire Co. of Monett, Mo., is not under any suspicion of wrongdoing, despite a search of Friend Tire's records.
Friend Tire and several other companies across the U.S. were the subject of a government search warrant executed si-
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multaneously the morning of Feb. 14, according to stories published in the Monett Times, Friend Tire's home-town newspaper.
Other companies subjected to the search warrant included Palmer Industries Inc. and Fleetwood Marketing, Macon, Ga.; Three Rivers Transportation Inc., Sioux City, Iowa, and Fort Worth, Texas; C. Davis Enterprises, Houston; Jim Lunsford Sales and GSA International Inc., Scottsdale, Ariz.; and other companies which went unnamed in papers filed in several federal district courts.
IRS agents seized bank records, receipts, invoices, disbursement ledgers and journals, employment records, tax records, purchase and sales invoices, canceled checks, deposit slips and all other documents that might relate to transactions between the various companies.
The government suspects at least some of the companies of certifying large tires for export and then selling them domestically as a way of dodging federal taxes. IRS regulations require excise taxes to be paid on all tires weighing more than 40 pounds, but the government allows exporters to credit the excise taxes against other taxes owed.
``Gray market'' tire sales have been a problem for the government for more than a decade, though in the 1980s they more often took the form of U.S. distributors buying European tires earmarked for home use and selling them in the U.S. instead. A 1988 Supreme Court ruling legalized gray market sales of that sort.
The Yokohama spokeswoman said there were ``not a lot of details'' available about the investigation, but added Friend Tire ``is not under investigation itself.'' Other companies were the target of the IRS, and the agency wanted Friend Tire's records to clarify what happened, she said, adding:
``Others collected excise taxes from Friend Tire, but didn't forward them to the government.''
As a rule, the government does not comment on criminal investigations until after they are completed, Mr. Oroz said.