Maryland Comptroller Peter Franchot on Wednesday announced the agency’s largest tobacco bust ever, resulting in over $450,000 worth of seized contraband tobacco products.
The raid, which took place on Nov. 5, recovered 521 packs of untaxed cigarettes, 1,246 untaxed premium cigars and 7,866 packages of untaxed loose and hookah tobacco products. Combined, those products represent a tax loss of over $286,000 for the state.
“This is not only illegal, unregulated activity going on out there in the state, but they’re not paying money that they need to, under our tax laws,” Franchot (D) said. “These are funds that should be used for things like public safety, education, health care, protecting our kids, protecting our citizens.”
The comptroller’s Field Enforcement Division led the investigation and raid that resulted in the arrests of two individuals.
Agents arrested Mehboob Chowdhury, 37, of Capitol Heights and Monzurul Islam, 29, of Columbia. Both individuals are charged with purchasing tobacco products from sources other than a wholesaler — and could face other charges, Prince George’s County State’s Attorney Aisha Braveboy said.
Field Enforcement Division agents believe Chowdhury and Islam smuggled the untaxed tobacco products into Maryland from another state where the tobacco tax is less or even non-existent, said the division’s director, Jeff Kelly.
Upon smuggling the products into the state, agents believe the pair stored the stash in a large storage facility in Capitol Heights and distributed the items to retail tobacco stores.
Kelly said the investigation began about a year and a half ago when the division noticed “commonalities in ownership and management” in Prince George’s County.
As the investigation was in its beginning stages, state Sen. Joanne Benson (D-Prince George’s) called the comptroller’s office asking if it could look into a group of tobacco stores that were clustered in Prince George’s County.
“There was emergence of tobacco stores. In one block, there were four. We even had a tobacco store in a laundromat,” Benson said. “We found that to be very interesting. And so with that, we began to talk with the county executive, we talked with the comptroller’s office to ask them to please investigate to see whether or not the practice of these stores were legal.”
After identifying a lead suspect and tracking activity, the Field Enforcement Division’s investigation culminated with the Nov. 5 raid, serving warrants at three Prince George’s County tobacco stores, a storage facility and of Chowdhury’s residence and vehicle.
The division also conducted inspections at two other Prince George’s County tobacco retail stores and another in Baltimore.
Following the Baltimore inspection, agents cited store clerk Abdul Karim Rubel, 18, of Baltimore. Rubel faces three misdemeanor charges relating to the sale and possession of untaxed tobacco products and cigarettes.
“This investigation and bust was the result of a year-long probe involving numerous law enforcement partners to dismantle the significant criminal activity in Maryland,” Kelly said in a press release. “I couldn’t be prouder of the work of our dedicated, effective and professional staff for upholding the law and looking out for taxpayers’ interests.”
In Maryland, packs of cigarettes and other tobacco products must be stamped to show that the state’s tobacco tax rates have been paid.
“Other tobacco products,” is the designation for products excluding cigarettes, such as any product made primarily of tobacco for the purpose of consumption by means of smoking, chewing or as snuff, or a cigar or roll for smoking that’s made entirely or in part of tobacco.
The state’s tax rate for a pack of cigarettes is $2 for each pack that contains at least 11 and no more than 20 cigarettes.
The tax for other tobacco products varies. The tax for premium cigars and pipe tobacco is 15% of the wholesale price, mass-marketed and multi-packaged cigars carry a tax of 70% of the cost, and all other tobacco products are taxed at a 30% clip, Kelly said.
“Tobacco smuggling is big business, and the perpetrators are more brazen than ever before,” Franchot said in a press release. “We will continue to use every resource at our disposal to fight this lucrative form of organized crime.”