Mississippi officials make largest contraband cigarette seizure in U.S. history

Introduction

An anonymous caller tipped off Mississippi authorities last month to what could be the largest contraband cigarette seizure in U.S. history. The 200 million-stick haul is valued at an estimated $20 million — three times the value of all cigarettes seized by customs officials in the United States last year, and more than 10 times the value of all customs seizures so far in 2009.

Officials have yet to confiscate the one million cartons of cheap off-brand smokes, which they say do not bear required tax stamps. Authorities believe the owner of the cigarettes intended to avoid paying the required state tax, thus sharply boosting the seller’s profit margin, according to State Auditor spokeswoman Lisa Shoemaker. An investigation is ongoing and officials are negotiating with the warehouse owner. For now, Shoemaker said, the suspect cigarettes remain in a secret warehouse guarded by Mississippi state officers.

Experts estimate that nearly one in ten smokes — some 600 billion cigarettes — are smuggled across the globe each year. The Center’s year-long investigation of the trade, by its International Consortium of Investigative Journalists, has tracked tobacco smuggling’s ties to organized crime, renegade factories from Russia, and American Indian reservations.

The cigarettes seized in Mississippi are comprised of cheap “fourth-tier” brand tobacco products, officials say, including Sonora brand smokes from India and King Mountain cigarettes from an Indian reservation in Washington state. Other cigs came from the Philippines, Mexico, and Colombia. Authorities also seized cases of Vaquero Little Cigars, produced by North Carolina-based General Tobacco, Inc.

The discovery comes as Congress votes on whether to increase government regulation of tobacco produces and shortly after a federal cigarette tax hike. John Colledge, a 30-year veteran of federal law enforcement and expert in cigarette smuggling, said he expects to see more large seizures in coming years.

“Tax increases do not cause smuggling,” he said. “But they do provide opportunities to organized crime groups when governments do not provide adequate laws, law enforcement resources, and secure tax stamps.”