Feds bust El Paso-based cigarette-smuggling ring

El Paso Times ^ | Jan 28, 2004 | Jennifer C. Kerr

[FITZ]

WASHINGTON - In the largest crackdown of its kind, federal officials said Wednesday they had broken up a cigarette-smuggling operation in five states.

Officials with Immigration and Customs Enforcement said ten people have been arrested in Texas, New Mexico, New York, Florida and California. Portions of a 92-count indictment detailing the alleged scheme were unsealed in El Paso.

Federal agents have spent more than three years investigating the smuggling operation, which they said sought to bring 5 million packs of bootleg cigarettes into the country. Authorities seized about 2.5 million packs, said to be worth about $20 million.

The indictment alleges that Jorge Abraham, 34, of Sunland Park, N.M., masterminded the plot. Distributors in Texas, California and New York bought the cigarettes and then sold them for a significant profit, according to federal officials.

"Cigarette smuggling costs the United States more than $1 billion in lost revenue every year, while pumping incredible profits into criminal organizations," said Michael Garcia, assistant secretary of Immigration and Customs Enforcement, in a statement.

[FITZ]

This kind of works against that argument that if drugs were legalized, no one would smuggler them any more and that organized crime rings would collapse. Cigarettes are obviously legal --- but the smugglers still are getting rich.

[Herodotus]

Yes, cigarettes are legal, but the horrendous taxes on them make a very nice incentive for smugglers. We're having more luck discouraging people from smoking by making it socially unacceptable than by taxing the hell out of them. Raise the taxes a little more and you'll see even more smuggling going on.

[_Jim]

Imagine that a - 'War' on Cigs (WoC) - and they're legal (but taxed to the hilt)!

[FITZ]

What I don't understand is why people don't just grow their own.

[Ursus arctos horribilis]

I knew the tobacco crap would lead to this. Raise prices and there will be those who see means to a profit in the illicit trade.

Now seems we will have the cigarette wars for which more jack booted Nazi thugs with guns can come forth to have fun and games across our fair country.

Stupid, the whole thing is just so damned stupid.

[Herodotus]

eh, more people in my group of friends quit smoking because it just wasn't cool any more than because of the higher prices. they were willing to pay the higher prices, but couldn't stand the oppobrium of us saying, please smoke outside. Let's end this ridiculous taxation stuff, and just keep at the smoking bans,

[FITZ]

jack booted Nazi thugs

They even showed up at the flea markets around here going after the vendors of $3 CD's, also smuggled in from Mexico.

[Starve The Beast]

You're exactly wrong. Cig smuggling didn't become popular until excessive taxation gave it a black-market profitability similar to banned substances. In an economic sense, the States and the Fed made cigs a banned substance, hence the black market interest.

I guess you could try to make the case that legalizing drugs and then taxing them excessively would amount to the same thing, but that would still knock the large majority out of the current profit in materials like, say, heroin.

The law of supply and demand is as immutable as the law of gravity, and just as unforgiving.

[FITZ]

Of course if they're legal AND the taxes are low --- they're still going to be smuggled if they're cheaper in Mexico than here --- but the government won't go after those who smuggle because of the taxes "lost".

[DoughtyOne]

Actually, the increased taxes on cigarettes makes fertile ground for smuggling. I am dead set against anything more than normal sales tax on cigarettes. This is why.

I read an article years ago in the Reader's Digest that told what happened to a town on our northern border with Canada when the state increased taxes on cigarettes.

When they did raise taxes, a black market sprang up overnight with underworld figures creating multiple dangerous scenarios for local citizens and even their youth.

Big mistake.

[umgud]

I once measured a pack of cigs and then computed the number of packs that could be hauled in a standard semi-truck van. I multiplied the result by $3/pack. I don't remember the number, but it was bigger than huge. What a ripe truck-jacking target.

[Doctor Stochastic]

It only shows that the cigarette addicts are just as willing to condone law breaking as other addicts.

[tbird5]

"just keep at the smoking bans"

Ya, that'll do it,,,ya right

[templar]

Authorities seized about 2.5 million packs, said to be worth about $20 million.

Cigaretts are worth 8 bucks a pack now? Glad I quit back when they hit 50 cents a pack, tax and all.

[TKDietz]

That's hilarious. Just like with drugs they inflate the price to the highest possible per pack price they can come up with to make the bust look more important than it was. I don't know about where the rest of you live, but I was just in a convenience store a few minutes ago paying for gas and I noticed Marlboro Lights on sale for $2.59 a pack.

But I have to say I am not so opposed to moderate sin taxes. The fact that prices kept getting higher was definitely a factor in my quitting smoking, and studies I have read about apparently show that high prices are more of a deterrent for young people who tend to be less able to afford cigarettes. I don't have a great problem with people who smoke and drink bearing a little more of the tax burden than those who don't because overall these people do tend to be more of a burden on society than those who abstain from these substances. Ridiculous taxes like they have in New York city though are bound to result in a thriving black market. It would not be so bad if taxes were fairly reasonable.

[NYCVirago]

That's hilarious. Just like with drugs they inflate the price to the highest possible per pack price they can come up with to make the bust look more important than it was. I don't know about where the rest of you live, but I was just in a convenience store a few minutes ago paying for gas and I noticed Marlboro Lights on sale for $2.59 a pack.

Cigarettes cost $7.50-$8.00 in New York City, because of all the taxes. No joke. Needless to say, cigarette smuggling has become pretty popular here as well.