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9 charged with smuggling cigarettes into Maryland

Thursday - 9/22/2011, 6:38pm  ET

Associated Press

UPPER MARLBORO, Md. - Nine people have been indicted on charges of illegally smuggling cigarettes from Virginia into Maryland, and nearly 15,000 packs of contraband cigarettes have been seized as part of the investigation, authorities announced Thursday.

The indictments, announced by State's Attorney Angela Alsobrooks in Maryland's Prince George's County, are part of a crackdown on a cigarette smuggling enterprise that officials said is increasingly enticing and lucrative for criminals.

Smugglers turn a quick profit by buying large quantities of cartons of cigarettes in states such as Virginia _ where the tax on each pack is 30 cents _ and reselling them in higher-tax states such as Maryland _ which has a $2-per-pack tax _ and then pocketing the difference. Smugglers take advantage of the difference in taxes from state to state, which in the case of Maryland and Virginia is $1.70, and deprive states of needed tobacco tax revenue, officials say.

Authorities say they're stepping up efforts to stem the flow of contraband cigarettes, but say it's a tough crime to eradicate because of the amount of money involved. The cigarettes seized in this investigation alone were worth nearly $89,000 and would have required a payment of $29,750 in taxes had they been purchased in Maryland, officials said.

The nine, who have addresses in New York, New Jersey and Maryland, were caught through surveillance and followed by law enforcement officials as they transported the cigarettes from Virginia across the state line. Virginia officials had alerted the Maryland comptroller's office that a number of people from out of state were buying large quantities of cigarettes with plans to sell them in other states.

"As soon as we confiscate their car on the spot, as soon as we put them in jail, as soon as we charge them with multiple felonies, it's a pretty cold bath that these tax smugglers are exposed to," said Maryland state comptroller Peter Franchot. He joined in announcing the arrests.

In the fiscal year that ended June 30, Franchot said, 115 people were arrested in Maryland and more than 180,000 packs of cigarettes were confiscated. He said that was two and a half times the amount seized in the prior fiscal year and that, in the first three months of the current fiscal year, 48 people have been arrested and more than 102,000 cigarette packs valued at more than $600,000 have been seized.

It's illegal to import more than two packs of cigarettes into Maryland, though Franchot said his office doesn't target people who break the law by accident. Rather, he said, investigators are going after the smugglers who load thousands of cartons of cigarettes into trash bags and suitcases as they cross state times. Sometimes smugglers even travel with children to throw off investigators. The cigarettes are sometimes resold to retailers and other times sold on the street on the black market.

"We want to send the message out that we take this crime very seriously," Alsobrooks said.

Transporting contraband cigarettes is a felony in Maryland, punishable by up to two years in prison or a fine of $50 per carton. Possession of contraband cigarettes is a misdemeanor.

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