Maryland Burned by Tobacco Smugglers

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    Law enforcement agents in Maryland have uncovered an underground tobacco smuggling operation.

    Fifty-four businesses are under investigation for selling the contraband. State agents said the smuggling scheme is cheating Maryland out of much-needed tax revenue.

    Tobacco Bust

    [DC] Tobacco Bust
    Maryland law enforcement agents uncovered a large collection of untaxed tobacco products. They seized goods worth more than $150,000. Authorities say one man was selling the products to stores across the state. (Published Monday, Jan 25, 2010)

    Kyun Hong is at the center of this tobacco smuggling operation. After receiving two tips that he was delivering untaxed cigarettes and other tobacco products to retail stores for sale, agents followed his car and documented deliveries he made to retail stores, authorities said. They got a warrant to search his Severna Park home and seized more than $150,000 worth of tobacco products.

    Maryland Comptroller Peter Franchot, the state's tax collector, said the smuggled tobacco products cost Maryland about $25,000 in lost revenue.

    The seized contraband literally remains stacked from the floor to the ceiling, just the way agents said they found it stored in Hong's home.

    Authorities charged Hong with transporting contraband cigarettes -- a felony carrying a fine of $50 per carton and two years in prison. He's also charged with possession of illegal cigarettes and all kinds of other tobacco products which could result in more charges.

    Agents said the arrest of Hong may lead to other cigarette smugglers and retail store owners who have been selling the contraband without paying Maryland taxes.

    At least six store owners have been charged with violating Maryland tax laws.

    Currently, state law does not require businesses to be licensed to sell tobacco products other than cigarettes, but the Maryland legislature is now considering a bill calling for oversight of this industry.