BROOKLYN — Just because New York City has the highest cigarette tax in the nation, doesn't mean people are paying it.
Half the city's cigarettes are sold with fake tax stamps or with no tax stamps at all, according to the New York City Department of Finance. So when consumers pay the "tax money" of $5.85 per pack, the profits end up in the pockets of bootleggers — and the city loses half a billion tax dollars a year.
To combat the prevalent problem the office of Brooklyn District Attorney Charles Hynes conducted "Operation Buttlegger," an eight-month investigation that led to the arrest of 23 people involved in the cigarette black market.
By law, every New York City cigarette carton must be marked with a joint New York City and state tax sticker, made by a licensed stamp agency.
Hynes' two investigators went undercover and found evidence of multiple people selling contraband cigarettes — including one who used counterfeit tax stamps to fool customers.
Meshulan Rothschild, 46, allegedly bought untaxed cigarettes and 10,800 counterfeit stamps from Virginia and transported the goods to his warehouse at 81 Spencer St. in Brooklyn. Rothschild and two of his accomplices face up to 15 years in prison if convicted of criminal possession of a forged instrument. Rothschild's third accomplice faces tax violations charges.
Another two defendants, Gani Hodja and Abdul Herkash, face up to 25 years in prison on robbery, larceny and assault charges. They are suspected of carjacking a shipment of black-market cigarettes in December and spraying Mace on the person delivering the contraband.
Other suspects face charges including tax violations and trademark counterfeiting.
The investigation is ongoing, prosecutors said.
"I want to send a clear message that tax cheats, no matter how they try to deprive the citizens of this state of legitimate revenue, they will be arrested and prosecuted," Hynes said in a press release.
"Since this investigation is not over, others who believe that they are above the law and seek to evade cigarette taxes, should take heed of what happened to these defendants."