Feds break up massive cigarette smuggling ring

By Terrapinzflyer · Dec 6, 2009 · ·
  1. Terrapinzflyer
    Feds break up massive cigarette smuggling ring

    Thirteen Washington area residents were indicted on charges of trading guns, drugs and cash for black market cigarettes to sell in New York, according to documents filed in federal court in Alexandria.

    Two conspirators are also accused of hiring a hit man to kill a husband and wife that they believed tried to steal from them.

    "The alleged crimes go far beyond illegal cigarettes, but also involve drugs, guns, and a plot to murder," U.S. Attorney Neil H. MacBride said in a statement. "This clearly exposes the dangers in contraband cigarette trafficking."

    Trafficking in contraband cigarettes is lucrative, as criminals avoid paying taxes and pocket the portion of the sale that otherwise would have gone to the state. It's most profitable in places where taxes are highest, such as New York City, which has a tax of $4.25 per pack, compared with 30 cents in Virginia. A contraband cigarette dealer in New York City can make an extra $4 per pack.

    The 14-month investigation was begun by the Stafford County Sheriff's Office. Authorities said the group paid or traded undercover agents more than $8 million in cash, 32,000 pills of Ecstasy, 39 guns for about 77 million cigarettes and fake Virginia and New York state cigarette tax stamps.

    In May, two of the smugglers turned to a gun for hire when they thought they had lost hundreds of thousands of dollars worth of contraband cigarettes.

    In a phone call, 32-year-old Xing Xiao of Fairfax vowed to put a bullet into the thief. Xiao believed one of his drivers of the trucks used to transport the contraband had stolen about 15,000 cartoons from a storage facility.

    Xiao and a co-conspirator met with an undercover agent posing as a hit man. The men showed the hit man a picture of what they called the "snitch couple" and provided information about their home, vehicle and daily routines. He then slipped the undercover agent $7,000 with a promise of $8,000 to come, documents said.

    During several raids in November, law enforcement officers found about $1.2 million, 50,000 Ecstasy pills, one firearm and 100,000 counterfeit tax stamps. Thirteen defendants lived in D.C., Virginia and Maryland. A 14th suspect lived in New York.

    Examiner Staff Writer
    December 6, 2009


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  1. RaverHippie
    It's funny seeing the counterfeit cig dealers on my block. They're usually also pushing fake sneakers. The tax in NYC is pretty effective, but times are hard so it would probably be more effective if so many people weren't clinging to addiction when they're lives are disintegrating around them. Glad I've never smoked a cigarette.
  2. old hippie 56
    Trying to recoup some of their lost money.

    RICHMOND, Va. (TheStreet) -- Philip Morris USA, a division of Altria(MO Quote)is suing ten New York and New Jersey retailers for the alleged sale of fake Marlboro cigarettes.

    The company is demanding that the retailers handover the profits they made from selling the counterfeit products and compensate the company for damages and attorney's fees.

    The US's largest tobacco company says cigarette smuggling is rife in New York, which has among the highest tobacco tax rates in the nation. A pack of Marlboros in Manhattan can cost more than $10.

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