A new lawsuit filed by the state of New York and New York City is accusing United Parcel Service of shipping more than 136 million contrabands cigarettes across the state in the last five years. Those smokes are worth a lot of tax dollars — about $5 million for NYC and $30 million for the state — and as such, the lawsuit is seeking $180 million in damages and penalties.
The lawsuit filed today in federal court in Manhattan claims that UPS shipped almost 700,000 cartons of cigarettes between 2010 and 2014 at a huge tax loss, reports the Wall Street Journal.
Not only that, but the suit alleges that UPS collaborated with various dealers to ship cigarettes illegally, claiming that at least 70 packages were marked as being handed over to a child. It’s illegal in the state to sell cigarettes to minors.
“We allege that the entities that ship these cigarettes through UPS earn enormous profits by avoiding the payment of required taxes and that the fees collected by UPS to ship these untaxed cigarettes are paid out of these illegal profits,” said New York City Corporation Counsel Zachary W. Carter.
The UPS denied the allegations to the WSJ in a statement from a spokesperson.
“Since 2005, UPS has continued to work with regulators on this issue. In fact, UPS agreed to stop delivering cigarettes to consumers nationwide at that time—a policy that went beyond the requirements of federal and state law,” the spokesperson said.
UPS isn’t alone in attracting the state’s baleful gaze — the state filed a similar suit for $70 million in damages and $165 million in penalties for alleged illegal FedEx shipments of cigarettes last year. There hasn’t been a decision yet in that case.
UPS Accused of Shipping Untaxed Cigarettes in New York [Wall Street Journal]
by Mary Beth Quirk via Consumerist
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