Exclusive: Illegal cigarettes are big business in New York City

NEW YORK (WABC) -- Authorities in the Bronx have announced a major takedown of a cigarette smuggling ring, with the year-long investigation resulting in more than $1 million in untaxed tobacco. And it appears illegal cigarettes are a big business in New York City.

It's an Eyewitness News exclusive.

By some estimates, 80 percent of the cigarettes sold in New York City are sold illegally, either over the counter or in the backrooms of bodegas where a typical pack can sell for as little as $8 or $9 instead of the usual $13.

Parkchester resident Robert Johnson buys them all the time.

"I save $3, $4," he said. "I have no problem with that."

But authorities are cracking down, seizing more than $1 million worth of untaxed cigarettes and cigars after a 15-month investigation.

The alleged ring-leaders have been indicted along with 18 others accused of smuggling huge quantities of tobacco products from states like North Carolina, where cigarettes sell for less than $5 a pack. They are then distributed across a network of more than 50 bodegas.

"The scam is, you go down to North Carolina, buy a ton of cigarettes at a very cheap price with no tax stamp on it," NYPD Deputy Chief Paul Ciorra said. "Bring them up here, and all that profit then gets put in their pocket."

And authorities say it's big money, alleging that suspect Shareef Moflehi bought his $675,000 house with cash. They say suspect Hector Rondon was so determined to avoid arrest, he was found hiding behind a trap door in his floor without clothes.

Jean Walsh is the chief of investigations for the Bronx District Attorney's Office.

"Smuggling cigarettes and untaxed cigarettes has been going on for a long time," she said. "This happens to be one of the largest cases, and they've been making a tremendous amount of money."

Investigators say it's devastating for legitimate grocers and for the city and the state, which are losing millions in uncollected tax revenue.

It's something Robert Johnson says he simply doesn't think about.

"I'm poor, too," he said. "So if I can get a pack of cigarettes for $8 or $9, I'm going to buy it."