AP Tobacco Writer
RICHMOND, Va. (AP) – Lawmakers are aiming to impose harsher penalties on cigarette traffickers in Virginia, where officials say low excise taxes have made it an attractive base for smugglers who can sell smokes on the black market in nearby states and funnel the profits to organized crime.
Virginia is home to cigarette giant Philip Morris USA and the nation’s most prolific cigarette factory _ as well as the country’s second-lowest excise tax at $3 a carton. That means smugglers can easily buy hundreds or even thousands of cartons and resell them in the Northeast, undercutting retailers and skirting the higher taxes imposed there to boost public revenues and curb smoking rates. New York City, for example, taxes cartons at $58.50 apiece _ nearly $6 a pack. Just a short drive away in Washington, D.C., the tax is $25 a carton.
Cigarettes also can be trafficked from neighboring North Carolina, which is home to cigarette maker R.J. Reynolds Tobacco Co. and also imposes low excise taxes.
Arkansas _ a neighbor to low-tax Missouri _ is among the states that have passed legislation aimed at cigarette smuggling in recent years, and others have stepped up enforcement efforts. But most rely on the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, which has prosecuted several high-profile smuggling cases in recent years.
“A lot of states are focusing on it more than they have in the past because they’re realizing that a lot of their tobacco control efforts, as well as their revenues, are not working as robustly,” said Maggie Mahoney, deputy director of the Tobacco Control Legal Consortium, a program that’s part of the nonprofit Public Health Law Center in Minnesota.
Smuggling enough cigarettes can lead to an enormous payday. ATF estimates that a car can carry 10 cases of cigarettes _ there are 60 cartons in a case _ with an estimated profit of $34,000.
Upgrade to a van, and 50 cases can turn a $170,000 profit, said Virginia State Crime Commission legal affairs director G. Stewart Petoe. A large truckload can haul 800 cases and net a profit of $4 million. The Justice Department says the lost tax revenues can add up to several billion dollars.
“There’s no other legal product in the United States where this type of money can be made within a thousand-mile drive,” said Paul Carey, chief of enforcement for the Northern Virginia Cigarette Tax Board, which works with 17 area jurisdictions to combat cigarette smuggling.
Authorities are confident that disrupting the smuggling rings can stem the flow of money to terrorist groups, though few federal trafficking cases end up leading to terror charges. In one notable case in 2002, a federal jury in North Carolina convicted two Lebanese citizens of diverting millions of dollars in cigarette smuggling proceeds to the radical Islamic group Hezbollah. Possible ties to terror groups have also been raised in other cigarette trafficking cases.
Sen. Janet Howell, D-Fairfax, who is carrying the legislative package addressing illegal cigarette trafficking, said some people might say “so what,” but the problem is that it is “bringing organized crime into Virginia and also we’ve had some cases where the profits of the illegal trafficking are going to terrorists.”
The package is wide-ranging and covers everything from “smurfing” _ buying cigarettes at Virginia retailers to resell elsewhere _ to forged tax stamps, selling cigarettes off the books and importing counterfeit cigarettes. The penalty for a first “smurfing” offense would double to a year in prison under state law, while repeat offenders caught smuggling at least 500 cartons could face up to 10 years.
Among the legislation’s supporters is the Virginia Association of Chiefs of Police. Executive director Dana Schrad said he hopes harsher penalties will serve as a deterrent, given that some criminals turn to cigarette smuggling because the penalties are less severe than those for drug dealing and other crimes. It will also give police officers in the field more tools to rein in criminal operations.
“Without the tools, they’re not going to go anywhere,” Carey agreed.
While increased penalties can help, police also have to step up enforcement efforts to make a dent in criminal enterprises, said John W. Colledge III, a consultant who once ran large-scale cigarette smuggling investigations for the U.S. Customs Service.
“If you’re just running around beating up on the little guys who are making money off this, that’s one thing,” Colledge said. “I’m a firm believer in you follow the trail wherever it leads you, but just jamming up these people that are driving one carload, one truckload at a time, that really doesn’t do much in the overall scheme of things.”
Michael Felberbaum can be reached at
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
- The 5 worst things you could do for your roof
- 6 coolest things brewing in Arizona
- The virus that keeps head and neck cancers on the rise
- State Fair ‘Kid Reporter’ has all the angles covered
- 4 important things to know about timeshare maintenance fees
- Signs of delayed car crash injuries
- The truth about sports concussions
- The Alzheimer's epidemic: Facts you need to know
- The season is here, keep your Fantasy Football team strong all season
- 8 TV shows you can't miss this fall
- Football is here: 6 tips to make this your best season ever
- Gameday recipes and beers to match
- 6 reasons the Cardinals are driven to win the Super Bowl
- The Pac-12 football season nears kickoff
- Tips to get ready for a pain-free golf season
- Protect your family with these 7 home security features
- How to train like an Olympic swimmer
- 2016 Olympics: A guide to must-see TV events
- The bride's guide to feeling your best on your wedding day
- Deciding when you need knee surgery
- Celebrating Fourth of July is much cooler in these AZ towns
- Top ten road trip bathrooms in America
- Six things causing a pain in your neck
- 5 things to make your summer move easier
- Three elements of a strong timeshare exit guarantee
- Stretches and exercises for carpal tunnel syndrome
- The best Major League ballparks have their own personality
- Comparing the best regular seasons: The '96 Bulls and '16 Warriors
- 3 Arizona road trips and the vehicles to get you there
- Colon cancer is preventable. Check these signs and symptoms to stay healthy.