Tobacco takedown: Bklynite and two others charged for cigarette-smuggling scheme

Up in smoke: New York State Attorney General Barbara Underwood on Friday announced the arrest and indictment of a Brooklynite and two other defendants who allegedly cheated the city and state out of more than $400,000 by illegally smuggling Virginia cigarettes (not pictured) into the borough.
File photo by Colin Mixson

A Brooklynite and two other men face up to 15 years in prison for allegedly smuggling more than a million out-of-state cigarettes into the borough as part of a criminal scheme that swindled the city and state out of roughly $426,000 in tobacco taxes, according to charges filed by New York State’s top prosecutor.

Attorney General Barbara Underwood on Friday announced she indicted the three men following a months-long investigation by federal, state, and local law-enforcement agencies dubbed “Operation Sidestep,” which found that the suspects snuck more than 6,200 cartons of cigarettes from Virginia, where the tax per package is 30 cents, into Brooklyn, where city and state taxes combined total $5.75 per pack — the highest in the nation.

“As we allege, the defendants ran a criminal trafficking ring that funneled over 1.25 million untaxed cigarettes into New York — while cheating New Yorkers out of hundreds of thousands of dollars in taxes,” Underwood said. “These traffickers put legitimate, law-abiding businesses at a disadvantage.

Investigators also seized several firearms, three vehicles, and more than $312,000 in cash in their probe, in addition to 341,000 untaxed smokes recovered from a Brooklyn warehouse.

New York State’s exorbitant tobacco taxes, which lawmakers enacted to curb smoking and promote good health, have led to the creation of a massive black-market economy, and bad actors smuggle more outside cigarettes into stores across the Empire State than in any other state in the country, think tank the Tax Foundation reported in 2017.

In 2015, for instance, more than 56 percent of all cigarettes purchased in New York State were smuggled in from elsewhere, totaling more than $1.6 billion in unpaid tax revenue, according to a New York Post report analyzing the Tax Foundation’s 2017 study.

The defendants arrested in Operation Sidestep, who include two Maryland residents in addition to the local man, received a top charge of criminal tax fraud, were arraigned in Kings County Supreme Court on Oct. 19 and 11, and are expected to return to court in December.

A spokesman for the attorney general’s office did not immediately comment on the cost of Operation Sidestep to taxpayers.

Reach reporter Colin Mixson at cmixson@cnglocal.com or by calling (718) 260-4505.

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