A cargo plane coughed up 150,000 cartons of illegal cigarettes at JFK Airport yesterday the largest federal seizure of contraband smokes from overseas in state history, officials said. Authorities swooped down on the plane in the morning and immediately began carting off what they said was evidence of a huge Internet smuggling ring designed to avert millions of dollars in city, state and federal cigarette taxes.
The cigarettes were destined for distribution throughout the country, officials said. The cargo airline was not identified.
It is believed that the cigarettes were manufactured in the United States, then shipped to countries such as Switzerland, where they were diverted for smuggling them back into the United States for illegal sale, sans hefty taxes.
Would-be buyers placed their orders over the Internet and by phone, which is illegal in New York because such transactions skirt tax laws, officials said.
How much is at stake in taxes?
In the Big Apple, for example, a carton of cigs runs about $70 including $33.30 in excise and sales taxes while the illegal smokes could cost as little as $15 a carton.
That translates into tens of millions of dollars a year that the city would lose overall in taxes, said Eric Proshansky, the chief City Hall lawyer probing the illicit ’Net sales.
The city has already successfully sued one Switzerland-based Internet cigarette retailer, landing a $17 million judgment against it.
In October, Manhattan federal Judge Naomi Recie Buchwald slapped the staggering penalty on the company Yespeedy/Otamedia for allegedly peddling the cigarettes without paying taxes.
The charges against the company included mail and wire fraud.
Proshansky said there are four other suits pending against 20 Internet firms suspected of similar shady dealings.Authorities said yesterday’s seizure came after a probe over several months that involved the federal Bureau of Alcohol, Tobacco, Firearms and Explosives; postal inspectors; and city and state tax and finance officials.
The smokes were being held yesterday at ATF’s hangar at JFK.
The agency said it plans to notify other states where the cigarettes were headed to warn them of the scam.
But authorities acknowledged that the battle against the scammers is difficult, particularly if they are incorporated in foreign countries.