August 13, 2007

DA Rice:  Group Ran Counterfeit Cigarette Ring  

Queens bust yields half million packs, $325k; 3 arrested  

MINEOLA – Nassau County District Attorney Kathleen Rice at a press conference Monday morning announced the results of a five-month investigation into a Queens-based cigarette ring that led to the arrests of three men and the seizure of more than 57,960 cartons of illegal, untaxed cigarettes.  More than half of the untaxed cigarettes seized at the Corona warehouse are thought to be counterfeit and made in China, posing a serious health risk to their consumers.

Flanked by Queens District Attorney Richard A. Brown, Nassau County Police Department Commissioner Lawrence W. Mulvey and the Department’s Asset Forfeiture Bureau, and the New York State Department of Taxation and Finance – Office of Tax Enforcement, Rice said the untaxed cigarettes had a street value of more than $3.4 Million and that, if sold, the loss in tax revenue to Nassau County and New York State could be more than $1 Million. 

“Dodging taxes and ripping off local and state government aren’t new concepts, but a ring of this magnitude is alarming,” said District Attorney Rice.  “When you couple the financial blow these crimes have on local budgets with the potential health risks the counterfeit cigarettes can pose to their consumers, it becomes imperative we crack rings like this one.”

Queens District Attorney Richard A. Brown said the counterfeit cigarettes pose an even greater health risk than most because they have bypassed U.S. safety inspections and regulations and are thought to posses incredibly high levels of tar and nicotine.

"Cigarette bootlegging is a multi-million dollar business that rips off the public both by flooding the market place with inferior products – containing dangerously high levels of tar and nicotine – while at the same time fueling an underground economy that does not pay much-needed state and local sales taxes. This case, I believe, will go a long way toward closing down the illegal distribution network that has retail outlets all across the New York-metropolitan area filled with untaxed counterfeit cigarettes,” said District Attorney Richard A. Brown.

Rice also said the counterfeit cigarettes were not “fire safe” cigarettes, as required by New York State law.  “Fire safe” cigarettes include a mechanism designed to extinguish the cigarette if the smoker discontinues its use for a small period of time.  Absent this safety mechanism, these cigarettes pose a potentially dangerous public safety concern.

The investigation began in February 2007 after the Nassau County Police Department received a tip about counterfeit cigarettes coming into Nassau County.  The Department’s Asset Forfeiture Bureau began investigating the ring and conducted a series of purchases from distribution points in Nassau and Queens Counties..  The investigation led to the surveillance of a Corona, Queens’ warehouse which was ultimately believed to be the New York-Metro headquarters for the operation.  The Nassau County District Attorney applied for and received a search warrant that was executed late last week.

Arrested at the warehouse in Queens were Chinese nationals Min Liang Yu, 21, Ru Dong Chen, 46, and Yulin Zhuang, 43.  Each defendant has been charged with a violation of Section 1814 of the New York State Tax Law, as well as Criminal Possession of a Forged Instrument in the First Degree.  They each face a maximum of 15 years in prison if found guilty of the forgery charge and four years if found guilty of the tax violation.

The cases against each of the three defendants will be handled by the Queens District Attorney’s Office.

Rice gave special acknowledgment to the Nassau County Police Department’s Asset Forfeiture Bureau for their investigation and hard work on this case.  The District Attorney also praised the U.S. ATF and New York State Department of Taxation and Finance for their involvement and assistance in the investigation.

The charges described above are merely accusations and the defendants are presumed innocent until and unless proven guilty.