New York City, California Sue Postal Service Over Illegal Cigarette Shipments
"Our nation's own postal service has ignored the practice and enabled one of the biggest killers in our country," New York City Mayor Bill de Blasio said. "It needs to end, and we intend to be the ones to end it."
October 22, 2019 at 04:27 PM
5 minute read
Photo: Shutterstock.com.
New York Mayor Bill de Blasio sued the U.S. Postal Service in Brooklyn federal court Tuesday for allegedly "turning a blind eye" to the illegal shipment of hundreds of thousands of cartons of cigarettes through international mail.
In a joint lawsuit filed with California Attorney General Xavier Becerra, de Blasio accused the USPS and Postmaster General Megan Brennan of violating a 2010 law regulating interstate cigarette deliveries and cracking down on illegal trafficking.
According to the 53-page complaint, the USPS was shipping as many as 600,000 cartons, or 6 million packs, to California and 500,000 cartons to New York City and state each year, resulting in tax losses of $19 million and $21 million, respectively. The filing also linked the shipments to organized crime and terrorist groups, which are said to profit from contraband cigarettes.
"Cigarette smuggling doesn't just break the law—it endangers the health of countless Americans and enriches terrorists and organized crime," de Blasio said. "Yet despite all of this, our nation's own postal service has ignored the practice and enabled one of the biggest killers in our country. It needs to end, and we intend to be the ones to end it."
Becerra, meanwhile, said his Department of Justice would "remain vigilant" in pursuing contraband cigarettes that are smuggled into California.
"Accepting and delivering contraband cigarettes is not only a health hazard for our citizens but a detriment to our state's economy," he said.
A spokesman for the USPS declined to comment on the lawsuit, citing a policy of not discussing ongoing litigation.
The USPS, an independent agency of the executive branch of the federal government, is prohibited under the Prevent All Cigarette Trafficking Act from accepting or transmitting any packages it "knows or has reasonable cause to believe" contain cigarettes.
However, the complaint alleged that the USPS failed to use a list of known commercial cigarette shippers provided by the U.S. Department of Justice in order to block shipments. Even when workers did identify contraband cigarettes, the filing said, the packages were returned to the shippers, allowing them to simply resend the parcels.
According to the complaint, the PACT Act also deterred domestic cigarette sellers from mailing cigarettes to buyers, but foreign vendors, less vulnerable to U.S. enforcement efforts, have become a major source of contraband cigarettes delivered through the USPS. Even some U.S.–based online cigarette sellers have changed their names and mailed cigarettes to domestic buyers using international mail, the complaint said.
According to the filing, the USPS was warned about the schemes by both New York City and California, as well as the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, but to little avail.
The USPS has said, according to the complaint, that seizure of contraband cigarettes is only discretionary and that its "return to sender," or RTS, policy is consistent with federal law. However, the lawsuit alleged that only a "fraction" of mailed cigarettes are actually returned.
"Instead of serving as an effective enforcement mechanism, the RTS Program obstructs the effective enforcement of and in fact violates the PACT Act's prohibition against transmitting cigarettes in the mail," the complaint said. "The persistence of cigarettes in the domestic mail stream is in significant part attributable to the USPS's insistence on giving packages of cigarettes back to PACT Act violators instead of confiscating and destroying offenders' cigarettes."
Cigarette smoking is one of the biggest causes of preventable premature death in the United States, killing more than 480,000 people nationwide and 26,000 New Yorkers per year.
Congress has also warned that groups such as Hezbollah, Hamas and al-Qaida have profited from trafficking in illegal cigarettes or counterfeit cigarette tax stamps, and that terrorist involvement in illicit cigarette trafficking will continue to grow because of the large profits such organizations can earn, the filing said.
The lawsuit, filed in the U.S. District Court for the Eastern District of New York, seeks a permanent injunction prohibiting the USPS from delivering packages known or reasonably believed to contain cigarettes, as well as other relief requiring contraband to be destroyed.
The case, captioned City of New York v. U.S. Postal Service, has not yet been assigned to a judge.
The city is represented by Hope Lu of the New York City Law Department. An online docket-tracking service did not list counsel for the USPS.
Read More:
Carter, NYC Corporation Counsel, to Retire in August, de Blasio Says
State Cigarette Tax Evasion RICO Lawsuit Gets Green Light From Manhattan US Judge
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