Larry Penninger, acting director of the Bureau of Alcohol, Tobacco, Firearms and Explosives' tobacco diversion unit, said investigations and prosecutions involving tobacco trafficking have been increasing as smugglers flood high-tax states with cigarettes from low-tax states.
From 2007 to last year, 27 states raised their cigarette taxes, according to the Mackinac Center for Public Policy, a Midland-based think tank that closely tracks tobacco taxes across the country. Mackinac describes tobacco smuggling as an "unintended consequence of high cigarette taxes."
There is so much illicit money to be made, Penninger said, that some drug and weapon traffickers are adding tobacco to their product lines to boost profits.
For example, in low-tax states such as Virginia, where cigarettes cost about $4.50 per pack, smugglers can sell a truckload (typically 800 cases) in New York at $13 per pack. New York is the highest-tobacco-taxing jurisdiction in the country.
Smuggling costs states and the government about $5 billion, according to U.S. government estimates.
"Everybody out there (involved in illegal trafficking operations) is tapping into tobacco," Penninger said.
Since the Sept. 11, 2001, terrorist attacks much of federal law enforcement has focused on terrorism. But tobacco smuggling is attracting fresh interest.
Written by
Kevin Johnson
GANNETT NEWS SERVICE
|