Black Market Terror

As the NY Post is reporting today, the cigarette tax enforcement problem has serious international repercussions: "Nearly two dozen Arab cigarette smugglers have been smoked out for buying and then reselling contraband butts to New York bodegas and other shops.
Lured by fake ads in Arabic-language newspapers, the smugglers bought $6 million in contraband smokes from New York tax and federal undercover agents.
And a top elected official now warns that the untaxed cigarettes could be funding terror overseas."

The huge disparity now caused by further increases in the New York State and City taxes is a potential bonanza for smugglers-and some of the profits from this smuggling will end up in the hands of terrorists:All the profits of the smugglers - whose sales to hundreds of area stores exceeds the business of most legitimate wholesalers - "was shipped overseas to the Middle East," said Deputy Commissioner William Comiskey of the state Taxation and Finance Office.
"We know that the money wasn't kept here," said Comiskey, whose agents conducted the elaborate sting, noting that "it's a possibility" that the smugglers' multimillion-dollar operations, which also include sales of guns and counterfeit tax stamps, could be at least partly funding terrorism."

And while kudos here go to the sting operation, it must be pointed out that millions more in untaxed smokes can easily be channeled through purchases from Indian retailers-a loophole that could be closed if Governor Patterson simply enforced the law that's on the books.

The current sting was set up in Virginia: "The sting led to the arrests of 21 out of 27 men named in money-laundering, trafficking and conspiracy indictments unsealed this week. Most of them are originally from Yemen and Jordan. The case, which is being prosecuted by federal authorities in Virginia, was set in motion in early 2007 by New York state Tax and Finance agents, who set up a warehouse in King George County, Va., and stocked it with cases of untaxed cigarettes." But the reality is that the smokes can be bought as cheaply right here in NYS-which is a scandal of potentially disastrous consequences.