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Wednesday, September 18, 2019

New York complaint alleges Virginia retailer part of scheme trafficking untaxed cigarettes

Federal Court

By Carrie Bradon | Jul 17, 2019


BROOKLYN, N.Y. (Legal Newsline) – New York City recently filed a federal complaint accusing a Virginia tobacco products retailer and several individuals of trafficking untaxed cigarettes in the city.

The complaint filed by the city July 11 in the U.S. District Court for the Eastern District of New York accuses Virginia-based Cigarettes Unlimited L.C. along with several individuals of violating the Contraband Cigarette Trafficking Act.

The city alleges the defendants purchased Virginia-taxed cigarettes from Cigarettes Unlimited then transported and sold the cigarettes in the city without paying for the New York tax stamp.

The complaint claims traffickers make monthly purchases of as many as 15,000 cartons of cigarettes taxed by Virginia at $3.40 a carton and then sell the cigarettes in New York without paying the $58.50 per carton cigarette tax levied by the state and city. By failing to file tax reports, the traffickers violate the Jenkins Act and the PACT Act (Prevent All Cigarette Trafficking Act), as well as the New York Public Health Law through the delivery of cigarettes to persons not licensed to operate a tobacco business. It is estimated that the defendant's operations have cost New York $27 million in lost taxes.

The city is seeking damages owed for taxes that have been evaded, a declaration against Cigarettes Unlimited, $100 for each pack of cigarettes delivered into the city and any other relief deemed fit. The city is represented by Eric Proschansky of Zachary W. Carter in New York.

U.S. District Court for the Eastern District of New York case number 1:19-CV-03998

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U.S. District Court for the Eastern District of New York

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