www.baltimoresun.com/news/maryland/politics/bs-md-franchot-tax-20120725,0,3043519.story

baltimoresun.com

Cigarette seizures quadrupled over two years

Franchot calls for stiffer penalties for tobacco smugglers

By Michael Dresser, The Baltimore Sun

6:42 PM EDT, July 25, 2012

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Maryland's seizures of contraband tobacco quadrupled between 2010 and 2012, Comptroller Peter Franchot said Wednesday, attributing the increase in part to lax penalties that fail to deter cigarette smugglers from a highly profitable enterprise.

Flanked by piles of confiscated tobacco and alcohol products, Franchot announced that his field enforcement agents and other police agencies had seized 325,851 packs of illegally trafficked cigarettes valued at $2 million in the 12 months that ended June 30.

The confiscations represent a near-doubling of the previous year's total of 184,498 and are more than four times the total posted in the fiscal year that ended June 30, 2010.

Franchot credited the increase in part to stepped-up partnerships between his office's enforcement arm and other law enforcement agencies. But he added that the numbers also reflect the money that smugglers can make by transporting cigarettes from low-tax states such as Virginia, where the tax per pack is 30 cents, to Maryland, where the state adds $2 to that cost.

The comptroller used the announcement to call on the General Assembly to pass legislation to "dramatically" increase the penalties for smuggling or possessing untaxed tobacco products in Maryland.

"Criminals are going to repeat this action," Franchot said. "It is too lucrative and the penalties are too small."

The Comptroller's office pointed to the case of Stepfon Leroy Wilkins, 49, and Chaniqua R. Rhodes, 40, of Bronx, N.Y., who were arrested on charges of transporting unstamped cigarettes March 5 and April 2 in Princess Anne and again June 4 in Harford County. Charges were dropped in the first case but are pending in the other two.

According to the comptroller's office, Franchot proposed legislation during this year's General Assembly session that would have increased the fines for transporting unstamped cigarettes from $50 a carton to a mandatory $150 per carton on the first offense and a mandatory $300 on subsequent offenses. The bill would have left the maximum jail term for a first offense at two years but increased the limit for subsequent offenses to five years.

The legislation passed the House of Delegates 115-12 but stalled in the Senate without a committee vote.

Franchot said the legislation "got caught up in politics" in the Senate and was held down "from on top." He declined to say whether he was referring to Senate President Thomas V. Mike Miller, with whom he has long had a contentious relationship.

The comptroller vowed to renew his effort to pass the legislation during next year's session.

Earl Fowlkes, assistant director of the comptroller's field enforcement division, acknowledged that many cartons of tobacco are sold illegally for every one seized.

"I would be hesitant to even guess what really gets through or what is sold here in Maryland," he said. "I do believe we are only touching the tip of the iceberg."

In addition to announcing the increase in cigarette seizures, Franchot said his office had confiscated $92,000 worth of illegal alcoholic beverages during the year ended June 30 compared with just over $50,000 the year before.

Contraband liquor and tobacco is held as evidence as long as needed and then can be sold to license holders at auction. The exception is beer, which is destroyed rather than sold because of its limited shelf life.

michael.dresser@baltsun.com