March 21, 2011

Man gets jail for illegally buying, selling cigarettes


By Ben Finley, staff writer Calkins Media, Inc.

Northampton – Eugene Grinberg got his cigarettes from China.

Ordering online, he bought knock-off versions of Newport – tax-free – for $17 to $19 a carton.

Once they arrived at his Northampton home, he’d smoke some and sell the rest to friends and acquaintances for $35 to $40. (Real cartons of Newport cigarettes sell legally for $60.)

On Tuesday, Grinberg, 30, paid dearly for those smokes. A Bucks County judge sentenced him to 2 1/2 to five years in prison for possessing and selling untaxed and counterfeit cigarettes.

That sentence was jacked up somewhat by Grinberg’s criminal history and a concurrent sentence he also got Tuesday for drug dealing in Bensalem, according to assistant district attorney Alan J. Garabedian.

Had Grinberg been a first-time offender, his sentence for tobacco tax evasion probably would’ve been lower, Garabedian said.

But Grinberg was something of a rare bird in the Bucks County Court system, where drug dealers are more common than guys who sell illegal cigarettes, officials said.

Pennsylvania is a state with a medium-size tax rate on cigarettes and, therefore, not a ton folks are smuggling them in, officials said. Unlike New York, with the highest cigarette tax rate in the country, Pennsylvania lacks dedicated undercover units that routinely bust up smoke rings.

Grinberg’s cigarette dealings were discovered by one of only 14 agents across the state who oversee all of Pennsylvania’s cigarette tax enforcement and the state’s 23,000 licensed sellers.

“We pursue these opportunities when we discover them,” said Elizabeth Brassell, acting press secretary for the Pennsylvania Department of Revenue.

“Typically, the biggest busts we see are someone driving a truckload from the Carolinas to New York, and one of our state troopers pulls them over in Pennsylvania,” she said.

Grinberg’s case was investigated by Northampton Detective George Kelly and Steve Moran, a retired Bensalem public safety director who now is a Department of Revenue agent.

Kelly said a criminal informant told Moran that Grinberg was selling untaxed cigarettes. Moran began investigating Grinberg’s Internet use and mail deliveries and then went to Northampton police, Kelly said.

When Moran and Kelly teamed up, they set up undercover buys at Grinberg’s house on West Bellwood Drive. Then, armed with a warrant, they searched the house and seized more than a dozen cartons.

Grinberg admitted to his scheme, saying another dozen cartons were on their way.

Lorillard Inc., which makes Newport cigarettes and other brands such as True and Old Gold, tested Grinberg’s cigarettes and determined they didn’t come from Lorillard, Kelly said.

The smokes also had fake tax stamps on them, making it seem as if they legally could be sold in New York, Kelly said.

“According to him, his cigarette selling was to support his cigarette habit,” Kelly added. “But he was importing a pretty large amount. I think he was making some sort of a profit.”

Grinberg’s public defender, Lisa Williams, declined to comment to the newspaper.

Grinberg was charged with counterfeiting tax stamps, possessing unstamped cigarettes and cigarette tax evasion, all felonies in the state crimes code.

John Colledge, a Nevada-based security consultant on tobacco smuggling and related organized crime, said some states don’t even bother enforcing their tobacco tax laws.

“Not every state has an enforcement program or police officers who specialize in that kind of enforcement,” he said. “Pennsylvania is one of the states that does.”

As for Grinberg, Colledge said: “He’s a small-time crook who saw an opportunity to make a few dollars.”

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