New York City and California are suing the U.S. Postal Service for allegedly looking the other way when foreign cigarettes are shipped into the United States, claiming the smugglers are evading millions of dollars worth of taxes and empowering organized crime.
The joint lawsuit, filed in Brooklyn federal court, claims tens of thousands of cartons cigarette packages are being mailed into the U.S. from places like Vietnam, China and Israel, among other foreign countries, then illegally shipped by the Postal Service. As a result, cigarette smugglers are able to evade cigarette taxes that add up to an annual tax revenue loss of $21 million for New York City, and $19 million in California. But officials say the trafficking of untaxed cigarettes costs the U.S. more than just lost revenue. Congress has found that cigarette trafficking provides income to terrorist and organized crime groups.
“Cigarette smuggling doesn’t just break the law — it endangers the health of countless Americans and enriches terrorists and organized crime,” Mayor Bill de Blasio said in a news release. “Yet despite all of this, our nation’s own postal service has ignored the practice and enabled one of the biggest killers in our country. It needs to end, and we intend to be the ones to end it.”
The lawsuit seeks to put a stop to the Postal Service’s alleged complicitness by forcing it, through a court order, to intercept and destroy packages believed to contain smuggled cigarettes. The lawsuit claims that the Postal Service fails to use a list of known commercial cigarette shippers provided by the U.S. Department of Justice to block shipments, so packages continue to be mailed even if they’re labeled as “cigarettes.” When postal workers do identify contraband cigarettes, they’re simply returned to the shipper, allowing shippers to resend their packages.
According to the complaint, the government has seen success deterring domestic cigarette sellers from mailing cigarettes to buyers thanks to the federal Prevent All Cigarette Trafficking (PACT) Act of 2010. But international cigarette vendors have had an easier time slipping through the cracks, as they’re less subject to U.S.-based enforcement efforts.
Package audits conducted last year at the John F. Kennedy International Mail Facility found mail parcels containing more than 100,000 cartons of cigarettes destined for 48 states, though most were headed to New York and California. Based on those estimates, officials believe the Postal Service may be shipping as many as 500,000 cartons – five million packs of cigarettes – annually to New York City and New York State. Even more are believed to be shipped to California – 600,000 cartons, which would equate to six million packs.
According to health officials, cigarette smoking is one of the leading causes of preventable premature death in the U.S., killing more than 480,000 people nationwide each year, including 26,000 New Yorkers. That figure surpasses the combined number of deaths from alcohol, car accidents, and guns. The World Health Organization has found that high taxes on cigarettes are highly effective deterrents against smoking, especially among young New Yorkers.
A Postal Service spokesman told the AP that it does not comment on active litigation.
