Had Hollywood been in charge of casting I would have never been offered the role…a white man targeting an Asian organized crime syndicate. But Hollywood and the bad guys didn’t understand my “motivation.” If I sold myself as a criminal I got to stay out of the FBI offices for the duration of the case. That’s a better incentive than any two-picture deal with promises of Red Carpet awards.
In the first few meetings I successfully convinced my targets I was “bad.” Thus began a three-year undercover assignment concluding with dozens of arrests for crimes involving surface-to-air missiles, counterfeit U.S. currency, fake Viagra, phony blue jeans, ecstasy, crystal meth, and an assortment of other contraband. But it all began with counterfeit cigarettes manufactured overseas. The bad guys were smuggling the illegal “name-brand” cigarettes into the United States. I guess the politically correct term would be “undocumented cigarettes,” but their activities avoided all kinds of federal and state taxes. Not only were the cigarettes fake but so were the tax stamps on each pack…made to resemble the stamps for whatever state where the fakes were to be sold. Their products were good. The packaging looked authentic and the tax stamps appeared real.
I’m not a big fan of statistics and studies, but I’ve read where China produces as many as 200 billion counterfeit cigarettes a year, and their neighbor, North Korea, manufactures more than 40 billion a year. I’m not sure of the actual numbers, but I do know I saw counterfeit cigarettes the bad guys claimed were made in both countries.
The FBI’s investigative interest included the tax avoidance issue, but another primary motivation was that many of these cigarettes found their way into convenience stores whose owners supported “man-created disasters.” (For those of you who have been on vacation, we used to call it “terrorism.”)
The whole issue of cigarette taxes has come up again with the feds and various states trying to tax their way out of an economic downturn. As anyone who has read my postings can attest, I’m not the brightest bulb on the tree. I just bring my street experiences to the table. So what did I learn from my “friends” who imported counterfeit cigarettes? Well…they welcomed any tax hikes. In fact, they strongly supported tax increases. The higher the taxes, the more demand for their untaxed product. So their attitude was “bring it on.” Also, at one point during the investigation, a study was released showing decreased cigarette sales which, according to the researchers, demonstrated the success of various government funded stop-smoking campaigns. My targets laughed at the study suggesting the only thing down was the sale of taxed cigarettes, not smoking. Again, I don’t pretend to know the answer. (I will admit I’m still trying to figure out why we tax a sin, count on that revenue, then complain when the users stop sinning and revenues are cut.)
As the recent spate of political nominees has demonstrated, understanding taxes can be difficult. Apparently even using Turbo Tax doesn’t guarantee strict compliance. It seems every election politicians from both sides of the aisle promise tax reform. It seldom comes with specific proposals. But more and more, specifics are being proposed: There are calls for a Flat Tax. Congressman Paul Ryan of Wisconsin proposes “A Roadmap for America’s Future.” Senator Jim DeMint and others have proposed various reforms: plans, not generalities. One of these plans might be the answer. The April 15th tax deadline came and went but the Tax Day Tea Parties and tax reform remain a major issue. Maybe now is the time to bring about meaningful discussions. Not just talk but real action. Just think if meaningful reforms were in place Tom Daschle could have been spared a national embarrassment and would be our Secretary of the Department of Health and Human Services.
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