- The Washington Times - Wednesday, January 28, 2004

A 92-count federal grand jury indictment was unsealed yesterday in Texas, naming a ring of suspected smugglers who schemed to transport more than $37 million in bootleg cigarettes throughout the United States.

Ten persons were arrested by agents from Immigration and Customs Enforcement (ICE) during raids yesterday in Texas, New Mexico, New York, Florida and California. The ongoing undercover investigation has resulted, so far, in the seizure of $18 million in counterfeit and genuine cigarettes smuggled into the country.

ICE Assistant Secretary Michael J. Garcia said the smugglers are believed to have cheated the federal government, as well as three state governments, out of $8 million in tax revenue, while reaping enormous profits. He called the probe the largest investigation to date involving cigarette smuggling.

“Cigarette smuggling costs the United States more than a billion dollars in lost revenue every year, while pumping incredible profits into criminal organizations,” said Mr. Garcia in announcing the indictment. “It exposes a vulnerability to the American economy and a vulnerability to U.S. borders. The number of ICE investigations into tobacco smuggling has increased by roughly 300 percent since April 2001.”

The indictment, unsealed in El Paso, Texas, charges that Jorge Abraham, 34, of Sunland Park, N.M., masterminded the plot and that he and associates used several schemes to smuggle genuine and counterfeit cigarettes into the United States.

It said the organization then sold the cigarettes to distributors in Texas, California and New York, who in turn sold them at a significant markup, depriving states of significant cigarette-tax revenue. The scheme also deprived the Treasury Department of customs duties and federal excise taxes, the indictment said.

Mr. Garcia said ICE agents in El Paso began the investigation in the fall of 2000 and worked closely with the ICE Tobacco Program in Washington and various field offices as the case developed nationally. He said ICE agents worked closely with their Customs and Border Protection (CBP) counterparts to identify shipments coming into the country.

The Internal Revenue Service; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the FBI; and the El Paso County Sheriff’s Department also provided significant assistance, he said.

“The success of this operation is testament to the continuing partnership by CBP and ICE to protect our borders and the American economy from criminals,” said Jayson Ahern, CBP’s assistant commissioner of field operations. “U.S. Customs and Border Protection is responsible for the control, management and protection of our borders.

“The close working relationship between ICE and CBP ensures that illegal contraband stopped by CBP at the border will be investigated by ICE, and criminal organizations brought to justice.”

The smugglers are accused of transporting more than 107 million counterfeit and genuine market cigarettes into this country, which would fill a dozen 40-foot shipping containers. A carton of counterfeit cigarettes can cost as little as $2 to produce in Asia and can be sold on the streets of New York City for $70 or more.

“This crime crossed state and national borders, and involved millions of untaxed dollars, which harms the nation’s economy,” said IRS Deputy Director Bridget Marchetta, who heads the criminal-investigations division. “Today’s indictment should send a loud message that these types of crimes will not be tolerated because their impact on our communities is too great.”

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