“For every action, there is an equal and opposite reaction.” That’s Sir Issac Newton’s third law of motion, and it is not only applicable to physics, but also to the host of rules and taxes passed by governments to regulate trade and commerce.
The action of increasing taxes on cigarette purchases has brought upon the reaction of criminal elements getting creative in skirting the law and higher prices.
As government taxes on packs and cartons of cigarettes continue to rise, organized crime and corrupt individuals keep churning out new ways to avoid the increased costs of buying and selling these products.
The expanding cigarette smuggling empire now stretches from counterfeiters in China and renegade factories in Russia to Indian reservations in New York and war lords in Pakistan and North Africa.
Cigarette smoking is on the decline, largely due to greater public knowledge of the fatal consequences of smoking, which range from cancer to emphysema to heart disease. It is also true that excise taxes placed on cigarettes have contributed to the drop in smoking, as many people have kicked the habit because it’s just too costly both to their health and to their bank accounts.
Despite all the taxes and public knowledge of smoking-and despite the many prohibitions of smoking in public places-there are still many Americans who want to smoke and get their fix as cheaply as possible. And as a result of this demand, black marketeers in this country are willing to break the law in order to cater to this crowd.
Last week, federal authorities and the NYPD arrested 16 people who were involved in smuggling cigarettes to stores in Brooklyn, Queens, the Bronx and Staten Island.
The people arrested were not the usual Mafia-type criminals. All 16 of those charged are Palestinian and all but two were living illegally in the U.S. One managed to flee to Jordan before the arrests were made last week.
Reportedly, cigarettes were purchased for $40 per carton and sold to their distributors for $50 per carton. They, in turn, sold to bodegas, grocery and candy stores and newsstands for $60 a carton- a huge discount from the usual $120 per carton, which includes taxes.
Members of the group would truck as many as 20,000 cartons of cigarettes into New York from Virginia and Delaware. They would then show up at small, local banks with beer coolers filled with cash to deposit.
But perhaps the most troubling aspect of this bust came from Police Commissioner Raymond Kelly, who reported that the group included “individuals on our radar with links to known terrorists.”
The proceeds from their illegal sales were reportedly used to finance arms for Hamas-the group that controls the Gaza Strip and has vowed to wipe Israel off the map. One individual was linked to Omar Abel-Rahman, the blind, imprisoned sheik who was convicted in 1993 of a plot to bomb New York landmarks.
This shatters the perception that the sale of untaxed cigarettes is a crime exclusive to traditional organized crime outfits. As this investigation shows, buying these smokes is not only hazardous to your health, but potentially hazardous to our national security.
Newton’s third law can work in a different way here: stop buying untaxed cigarettes, and cut off another source of funding from those who serve to do us harm.
