Cigarettes have become very expensive in Columbus, Ohio as well, though not as outrageous as in New York City. I hear, however, that they are still quite cheap in many parts of the South (confirmed in the article below).
Anyhow, with price increases & further regulations (if no outright Prohibition yet) in New York, some enterprising people have begun to see business opportunities here, according to the article below & others like it:
***** The Washington Post March 6, 2000, Monday, Final Edition SECTION: A SECTION; Pg. A12 HEADLINE: N.Y. Ethnic Groups Sell Close to Home; Smugglers Find Loyal Clientele Among Neighbors BYLINE: Sharon Walsh; David B. Ottaway , Washington Post Staff Writers DATELINE: NEW YORK
The cigarette road warriors drive town cars with false trunks and minivans that are leased and swept for electronic bugs. They may cover their contraband with old mattresses or tarpaulins while dashing up and down I-95 between Virginia and New York. Often, their cargo on the return trip includes grocery bags full of cash. And the vast majority of these smugglers are from the city's ethnic communities and deal only with each other.
Some are in the United States illegally. Some have families here and in their home countries--and support both well because cigarette smuggling is so lucrative.
Pursuing the smugglers is tough. Few agents target them because more urgent crimes have priority. In the city's finance department, about 5 percent of 18 investigators' time is spent on cigarette smuggling, said Thomas Stanton, head of the New York department.
On Wednesday, New York state and city raised cigarette taxes to $1.19 a pack--the highest in the country. Tax agents now are bracing for an onslaught of new smugglers seeking to profit from the difference in New York's tax and that of Virginia, the lowest in the country at 2.5 cents a pack.
Last Thursday agents raided a warehouse in Brooklyn used by four ethnic groups and found six bins filled with $135,000 worth of contraband cigarettes. One person was arrested and three others will soon be indicted, Stanton said.
Twenty years ago cigarette smuggling was the province of organized crime members who bribed state authorities to get tax stamping licenses and employed huge trucks carrying 50,000 cartons. But organized crime dropped out in the late 1970s to concentrate on other ventures.
As ethnic groups became proprietors of stores in their own communities, individuals and small groups became their suppliers, each developing a distinct method of operation. Arab smugglers make contacts in mosques and sell their goods to bodegas, newsstands and small retail shops, which in turn sell to individual smokers. The Chinese form family partnerships and deliver their supplies to warehouses where they are distributed to retailers within their own community. The Russians deliver only to private homes.
Peppa, a former cigarette smuggler in the Russian community, now works as an informant for the New York City Department of Finance and receives 35 cents for every carton of bootlegged cigarettes recovered. Dressed in black from his knit cap to his shoes, he calmly smoked Marlboros and drank Coca-Cola as he described the Russian way of smuggling.
The Russian bootleggers, like other smugglers, buy the cigarettes at discount stores in Virginia and then drive to New York, where the cigarettes are unloaded in warehouses. Instead of distributing directly to retailers, the bootleggers employ 50 to 60 delivery people who wear beepers. They take your phone number and address and have free home delivery in Brighton Beach, Sheepshead Bay and Coney Island.
When asked how many smokers in the Russian communities buy smuggled cigarettes, he replies in heavily accented English: "Ninety-nine percent....Everyone wants to save money."
In the Arab community, word often goes out from the mosque that runners are needed to bring back Virginia cigarettes, tax investigators said. An Arab alien arrested recently in Maryland, Salah Aldalah, came in on a six-month visitor's visa in 1990. He has been arrested nine times on smuggling and other charges but never deported, according to tax officials.
Sonny, 48, a former smuggler from Latin America who once sold mostly to Middle Eastern retailers and now cooperates with tax officials, recounted with pride his life in the trade.
In early 1996 neighborhood friends bragged about the money to be made and Sonny decided to try it, driving to Alexandria, where a contact would provide him with the merchandise.
Soon he bought a second van and was driving to the Richmond area outlets of the Wal-Mart Stores-owned Sam's Club and Costco Wholesale Corp.'s Price Club.
He took precautions. He carefully concealed his product, never violated the speed limit and pulled over frequently to be sure he wasn't followed.
He had only one close call when his van was rammed in New York during a run in which he had $65,000 in cash stashed in the back. After some fast talking, he was able to persuade the other driver not to call the police.
Sunny was handling so much cash every day that, to speed up his dealings, he bought an $1,800 money-counting machine and was making a profit of $2,500 a day.
If the profit was high, so was the stress. Sonny once spent 42 straight hours driving back and forth to fill customers' orders. He often had to sleep in his van and was away from home six or even seven days a week.
"It was a hell of business," he said. "I was very happy."
At least initially. But competition with other smugglers was fierce, he was exhausted from near constant driving and tense from the cat-and-mouse game of avoiding arrest.
After two years, he was caught because a friend ratted on him, he said.
"The stress for me wasn't worth it," he recalled, only to have immediate second thoughts.
"I'd make a killing now," he said. "I'd still be in business if I hadn't got caught."
As the tax gap widens between Virginia and New York, Stanton fears that another group of New Yorkers is about to join the city's ethnic minorities in the smuggling business.
"Organized crime will get involved," he said. "You're going to see hijackings all over the place....It will get dangerous." *****
Yoshie