The Buttleggers

The economics are elementary: buy cigarettes in a low-tax state like North Carolina (2-c- tax per package), bootleg them to a high-tax state like New York (as much as 23-c- per package) and count the profits. This year, buttleggers should gross some $500 million, most of it pocketed by organized criminals. Concerned tax agents from eight government units (the states of Pennsylvania, New York, Connecticut, Massachusetts, New Jersey, Maryland and Virginia, plus New York City) guess they are losing up to $300 million annually in revenues through interstate smuggling.

The taxmen figure that much of the haul is transported in tractor-trailers that can carry 10,000 cartons of cigarettes at a time for a profit of $15,000. Vending machine companies, restaurants and motels controlled by the Mafia can be easily persuaded to retail the cigarettes. The seven states and New York City are hoping for a $750,000 federal grant to help them combat the crime, but they know it won't be easy. Contraband cigarettes are even sold occasionally in Harrisburg's North Office Building, headquarters of the Pennsylvania state revenue department.

This file is automatically generated by a robot program, so viewer discretion is required.