Franchot seeks harsher penalties for untaxed cigarette charges

Franchot seeks harsher penalties for untaxed cigarette charges

(March 22, 2013) Two out-of-state residents were charged March 10 with possessing and transporting unstamped cigarettes in the state of Maryland.

Comptroller Peter Franchot wants stiffer penalties for those crimes.

After a state trooper stopped their 2013 Nissan Altima for speeding on Route 113 at Route 589 near Showell at about 12:15 p.m., he searched the car and found 430 cartons of untaxed cigarettes.

The driver, Baligh Mohamed Alsaidi, 32, of Hazelton, Pa., and his passenger, Bassam M. Algazali, 37, of Bronx, N.Y., said they bought the cigarettes in Virginia and were taking them to New York to sell.

Personnel from the state Comptroller’s Office went to the Maryland State Police barrack near Berlin to assist with the case.

In February, Franchot met with State’s Attorney Beau Oglesby and various members of law enforcement about aggressively combating such cigarette smug-

gling.  On his way to Snow Hill, he received word that members of his Field Enforcement Division had confiscated thousands of packs of contraband cigarettes on Route 13 in Worcester County. His agents had been conducting routine surveillance on the Maryland-Virginia border and saw a large quantity of cigarettes being loaded into a Toyota Camry registered in Maryland.

When the agents stopped the car on Route 13 and Stockton Road, they found and seized 4,100 packs of contraband cigarettes, valued at $26,445. They charged the driver and his two passengers with possessing and transporting unstamped cigarettes in Maryland.

“Statewide, we saw a 150 percent increase in the amount of seized contraband cigarettes last month compared to the same time last year,” Franchot stated in a press release that day. “This illegal activity will not be tolerated in the state of Maryland.”

The transporting charge carries a fine of up to $50 per carton or imprisonment of up to two years, or both.

Franchot said that the Feb. 27 incident in Worcester County was “a prime example of the dire need for Senate Bill 69’s passage.” Such crimes, he stated, “rob our state of much needed revenue.”

Senate Bill 69 would increase the monetary penalty for a first violation to a mandatory fine of $150 per carton or each package of other tobacco products. For subsequent violations, a mandatory fine of $300 per carton or package would be imposed.

The bill passed the Senate by a vote of 46-1 on Feb. 14 and had its first reading in the Ways and Means and Economic Matters Committee in the House of Delegates on Feb. 15. It is scheduled for a March 26 hearing.

Franchot believes the current $50 per carton fine is inadequate to deter cigarette smuggling.

According to the Comptroller’s Office, the Field Enforcement Division charged an average of 15 cigarette smuggling incidents and three subsequent incidents annually from fiscal year 2007 through fiscal year 2011.

In fiscal year 2012, the number of initial incidents increased to 88, but the subsequent incidents remained at three. Also in fiscal year 2012, each initial incident involved an average of 399 cartons and each subsequent incident involved an average of 565 cartons. The average fine imposed was $1,799, well below the $50 cap allowed under current law.

Ofer Biton, 42, of Israel was not fined at all. His charges of possessing and transporting untaxed cigarettes were placed on a stet, or inactive docket on March 5.

Biton had the unfortunate experience of being a passenger in a minivan driven by his uncle, Yossef Dahan, who traveled from New York to Virginia on Oct. 18, 2012, to buy cigarettes for resale in New York. Biton had arrived in the United States from Israel only about two hours before the trip south started and he was reportedly unaware of its purpose.

On the return trip north, Dahan was stopped for speeding near Pocomoke. Looking into the minivan, a police officer saw cardboard boxes covered with trash bags. Some cigarette cartons were poking out from beneath the bag. A search revealed 303 cartons.

In Circuit Court in Snow Hill on Jan. 14, Assistant State’s Attorney William McDermott said the cigarettes had a retail value of $19,556.40 and if they had been purchased in Maryland, the state would have had income of $6,064 in taxes.

Judge Dale Cathell said Maryland is spending money because of taxes not paid to New York. He fined Dahan $5 per carton and issued a 30-day suspended sentence.

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