Cigarette seller in trouble in N.J.

Nick Rees Oct. 7, 2009, 2:53pm


TRENTON, N.J. (Legal Newsline) - A New York-based mail order cigarette seller has been found to be in violation of numerous New Jersey state laws by the state's Superior Court.

New Jersey Attorney General Anne Milgram prevailed on all counts of her lawsuit against Red Jacket Tobacco, which was charged with illegal business practices stemming from the advertising and mail order sale of so-called tax-free cigarettes in New Jersey.

"This is an important outcome for New Jersey consumers and taxpayers," Milgram said. "Through our lawsuit, we have put a stop to tobacco sales practices that sought to evade taxation.

"We have also held Red Jacket accountable for deceiving New Jersey consumers with phony enticements for 'tax free' product, and for selling tobacco by mail with no regard for whether buyers were of legal age."

Red Jacket and its owner, Lesley A. Hoag, were ordered by Superior Court Judge Maria M. Sypek to pay penalties, costs and fees of more than $760,000. The company is also permanently enjoined from doing business as it had been doing under the ruling.

In her decision, Sypek found that Red Jacket was in violation of state laws for selling cigarettes in New Jersey without a license and for selling cigarettes not listed in the New Jersey Attorney General Tobacco Manufacturer's Directory.

Sypek also found that Red Jacket had violated the state's Consumer Fraud Act by sending 60,000 New Jersey consumer Money Mailer advertisements containing misrepresentations that included statements offering "tax free" cigarettes that actually had taxes due on them.

Red Jacket was also found to have advertised that, "If we don't have it, we can order it." By law, only cigarettes on the Attorney General's Directory may be sold in the state.

Sypek also found that Red Jacket had engaged in conscionable business practices that included the sale of cigarettes without tax stamps and the sale of cigarettes to consumers without verification that the consumer was at least 19 years of age.

Red Jacket's actions were found during a Division of Consumer Affairs undercover investigation. Investigators twice purchased cigarettes from Red Jacket, which lists its address as a post office box in Salamanca, N.Y., by calling the phone number on a Money Mailer advertisement. The Money Mailer had been mailed to at least 20,000 New Jersey consumers at least three times.

The investigators purchased several cartons of cigarette brands that were not on the Attorney General's Directory, including the Florida-based Dosal Tobacco Corporation's 305's brand.

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