BERLIN — With a rash of recent illegal cigarette smuggling arrests across Maryland, including several major busts in Worcester County this winter, lawmakers are considering legislation that would significantly stiffen the penalties for transporting illegal tobacco products in Maryland.
Comptroller Peter Franchot, along with allied law enforcement agencies, this week urged senators to pass a bill that would greatly enhance the penalties for smuggling untaxed and unstamped cigarettes and tobacco products through the state. The House last week passed its version of the legislation by a vote of 115 to 12, but the Senate has not yet taken up the discussion with the 2012 session winding down.
Illegal cigarette smuggling through Maryland has spiked sharply already in 2012 as would-be smugglers continue to purchase cheap smokes and tobacco products in states south of Maryland and transport them to destinations north of the state where they fetch prices often 10 times their value. For example, thus far in fiscal year 2012, Comptroller’s Office agents have confiscated $1.5 million worth of contraband cigarettes passing through the state, which is more than the roughly $1.2 million worth of cigarettes confiscated by the agency in fiscal year 2011.
“The state is losing a substantial amount of much-needed revenue as a result of cigarette smuggling and the associated tax loss,” said Franchot this week. “Just as importantly, the minor penalties currently imposed for being caught smuggling do nothing to deter criminals from continuing to blatantly break the law.”
Because of its geographic location between the cigarette-producing south and the lucrative black market for illegal smokes in major metropolitan areas to the north, cigarette smuggling has been on the increase in Maryland. In Worcester and Wicomico counties, the number of arrests made has spiked upward in recent months along pipeline corridors such as Routes 113 and 13.
On Jan. 25, for example, Maryland State Police troopers arrested a Newport News, Va. man for attempting to transport hundreds of cartons of unstamped and untaxed cigarettes through Worcester. What began as a routine traffic stop turned into a significant bust as 400 cartons of cigarettes valued at around $24,000 with an $8,000 tax loss to the state of Maryland were discovered.
A week later, on Jan. 31, a Maryland State Police trooper patrolling along Route 113 near Carey Rd. pulled over a van with Pennsylvania tags for speeding and discovered 690 cartons of untaxed and unstamped cigarettes in the cargo area. The estimated value of those cigarettes came in at over $41,000 with a tax loss for Maryland estimated at nearly $14,000.
Again on Feb. 15, an MSP trooper pulled over a vehicle on Route 113 in Berlin for an equipment violation and found 460 cartons of illegal cigarettes, $4,600 in cash and a ledger documenting the sales and purchases. The illegal cigarettes were valued at $27,500 with a tax loss for Maryland estimated at $9,200. In that case, the suspects admitted transporting the cigarettes illegally from Virginia to New York.
Currently, the transportation of contraband cigarettes through Maryland is a felony and carries a fine of $50 per carton and/or two years imprisonment. The possession of contraband cigarettes in Maryland is a misdemeanor and carries a maximum flat fine of $1,000 and/or imprisonment up to one year.
The legislation would impose a mandatory $150 fine per carton for the first offense and a $300 fine for subsequent offenses as well as up to two years in jail.
“Cigarette smuggling is a lucrative operation for criminals, due, in part, to the minor consequences they face if caught,” Franchot said. “Smuggling not only takes revenue out of state coffers, but also makes cigarettes easily accessible to young people. Penalties for this crime must be tougher in order to snuff out this public health and safety risk.”