- Associated Press - Wednesday, September 24, 2014

NEW YORK (AP) - New York City’s Law Department on Wednesday said it had reached a $5 million settlement with Virginia-based package delivery company LaserShip Inc. over deliveries of untaxed cigarettes.

The city had filed a civil lawsuit against the company in late 2013, saying LaserShip had delivered more than 120,000 cartons of untaxed cigarettes throughout the city between 2011 and June 2013. The city said those deliveries to stores, residences and offices violated federal and state law. There were more than 23,000 deliveries.

LaserShip had been part of a network of companies that delivered untaxed cigarettes around the country. The distribution system was created by online distributors in upstate New York after Congress passed a law that took effect in July 2010 banning cigarettes being shipped through the U.S. Postal Service. Major shipping companies like FedEx and UPS also agreed to stop. Other shipping companies, like LaserShip, were brought in.

Under the agreement, LaserShip agreed to end all cigarette shipments and make its compliance practices stronger. The city said the $5 million settlement more than covered the actual $1.9 million loss in taxes from the untaxed cigarettes.

The company did not answer an email seeking comment.

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