Officials Secure $20 Million in Contraband Tobacco

Contraband cigarettes collected by state and federal officials

State and federal officials are investigating what could be one of the largest contraband cigarette cases in the country. MPB’s Stephen Koranda reports.

The State Auditor’s Office, the Mississippi Tax Commission and federal officials took part in the action Tuesday. They secured a warehouse holding around 20 million dollars in contraband tobacco. Under state law tobacco must get a tax stamp within 72 hours of entering the state. State Auditor Stacey Pickering says it was no error that caused these products to go unreported.

“30 truckloads of cigarettes in a warehouse that have been there, we know for a fact, well over the 72-hour period, that were not stamped. There was no stamping equipment on site, so they showed no intention of complying with state law.”

The tobacco selling without a tax stamp would short the state around 1.5 million dollars in tax revenue, and the federal government more than 8 million dollars in taxes. A preliminary count shows the warehouse included around a million cartons of cigarettes and small cigars. Again, State Auditor Pickering.

“These are mostly discount brands of cigarettes that come from countries such as, not only the United States, but India, Native American tribes, the Philippines, Colombia, Mexico and other countries around the globe.”

No arrests have been made. Officials wouldn't disclose the location of the warehouse, saying it could hinder the investigation. State Tax Commissioner Ed Morgan says there’s still plenty of work to do.

“A true official inventory of the product, determining ownership, the valuation of the products, and the end result is our role in the collection of tax and any potential penalties that might come out of this.”

Pickering says charges could relate to possessing the untaxed tobacco and tax evasion.