New York State Lawsuit Claims UPS Shipped Untaxed Cigarettes
ALBANY, N.Y. (CBSNewYork/AP) -- New York authorities have accused United Parcel Service in a federal lawsuit of shipping 700,000 cartons of untaxed cigarettes in the state between 2010 and 2014 despite an earlier agreement to stop.
Attorney General Eric Schneiderman and New York City Corporation Counsel Zachary Carter are seeking $180 million from Atlanta-based UPS, saying the cheap cigarettes increased smoking by New Yorkers while also costing $29.7 million in lost tax revenue.
New York State Lawsuit Claims UPS Shipped Untaxed Cigarettes
"We allege that UPS made more than 78,500 illegal shipments of cigarettes to consumers and other unscrupulous dealers," Schneiderman said, adding half of those shipments came to the five boroughs and many were accepted by minors.
The lawsuit claims UPS shipped unstamped cigarettes from at least six unlicensed vendors on Indian reservations.
"Not knowing that those companies were shipping cigarettes via parcel service should essentially disqualify you from running a large corporation," Schneiderman said.
New York State Lawsuit Claims UPS Shipped Untaxed Cigarettes
The lawsuit claims UPS created a public health danger.
"The difference between paying $5 dollars per pack or $10 dollars per pack could be the difference between not smoking and a lifetime of addiction," Schneiderman said.
UPS issued a strong denial saying, "UPS denies allegations in a lawsuit filed by New York State and New York City that we have knowingly shipped cigarettes to consumers and will vigorously defend our position. Since 2005, UPS has continued to work with regulators on this issue. In fact, UPS agreed to stop delivering cigarettes to consumers nationwide at that time - a policy that went beyond the requirements of federal and state law. UPS tobacco policy strictly prohibits the shipment of cigarettes to consumers and unlicensed dealers or distributors, and we terminate service under that contract program if that policy is violated."
The civil suit filed Wednesday in Manhattan seeks an injunction to halt the shipping along with damages and penalties for contraband cigarette trafficking and treble damages for enterprise corruption.
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