Black-market cigarettes are costing many states hundreds of millions of dollars a year in lost tax revenue. The lucrative, illicit trade is attracting violent criminal gangs that can be lethally ruthless, NPR reports. The rewards, and the risks, of dealing in contraband cigarettes became clear recently to Capt. Dennis Wilson of the Fairfax County, Va., Police Department, near Washington, D. C. Undercover investigators “had two cases where contacts that we were working with had asked us to murder their competition,” Wilson says. “We were able to fake the murder of the individuals.”
Across the nation, organized crime groups with ties to Vietnam, Russia, Korea, and China are competing for a share of the profits, says Edgar Domenech, who leads the Washington, D.C., field office of the Bureau of Alcohol, Tobacco, Firearms and Explosives. “Depending on the quantities of cigarettes that you’re purchasing, you’re talking in the hundreds of thousands to the millions of dollars,” Domenech says. So the stakes are high. Criminals buy cigarettes in bulk, in states with relatively low taxes such as Virginia or North Carolina. They load them into tractor-trailers or rented trucks and drive them north, for example, to New York. They follow the same routes they would use to traffic illegal drugs. Police say a carton that costs less than $40 including tax in a store in Virginia goes for more than $100 in a store in New York City. Because of high taxes in the city, selling contraband cigarettes at rates even slightly lower than their value in the store can mean big money for criminals.