An accused cigarette smuggler from Orange County was carrying nearly 500 packs without New Jersey revenue stamps and $11,324 in suspected proceeds when Mahwah police stopped him on Route 17, authorities said.
Detective Eric Larsen and Officer Martin Kilroy stopped 32-year-old David Silverman of Monroe for moving and equipment violations near Mountainside Avenue Monday afternoon, Police Chief James N. Batelli said.
They quickly discovered that had three outstanding warrants from the Palisades Interstate Parkway police, Cranford and in the township, the chief said.
Silverman consented to a search of his vehicle, which turned up two large cardboard boxes filled with smokes, Batelli said.
“All were stamped with Virginia's cigarette tax stamp and did not bear the required N.J. revenue stamp,” he said.
The pair also found $11,324 “in various denominations packaged in a manner believed to be consistent with criminal activity,” the chief said.
“Tobacco traffickers typically purchase cigarettes from low tax states and sell them in higher tax states,” Batelli said.
They make good money, too.
A pack legally bought in Virginia for roughly $4.70 can then be resold in New York City for $13.50.
That’s a profit of $8.80 per pack – which, in Silverman’s case, would come out to $4,400 in tax-free profit.
Township police charged Silverman with illegally transporting out-of-state cigarettes and money laundering, then turned him over to PIP police for their warrant.
He’s due to answer the Mahwah charges on Dec. 14 in Central Judicial Processing Court in Hackensack.
Police also contacted the New Jersey Division of Taxation, Batelli said.
The New Jersey Legislature adopted the original Cigarette Tax Act in 1948.
Cigarette smuggling hurts in several ways, according to the Division:
- State programs, and the citizens they serve, lose when tax revenues are not collected;
- Legitimate, licensed retailers, wholesalers, and distributors are forced to compete against a black market;
- People become less likely to voluntary pax taxes when they see others not doing it.
NOTE: According to Batelli, legal cigarette distributors pay:
- $1.01 per pack in federal excise tax;
- from 17 cents to $6.16 per pack in state and local excise taxes;
- 60 cents per pack to the Master Settlement Fund for health care costs incurred by the states because of tobacco use by their citizens.
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