Cigarette smuggling ring sends millions of euro up in smoke

Date: 06/06/02

By David Cronin

THE EU's anti-fraud office OLAF is investigating a cigarette smuggling network which may have cost member states more than €24 million in lost tax revenues.

Now at an advanced stage, the inquiry was triggered by a tip-off from Portuguese customs officials after the seizure of 15 million Winston-brand cigarettes allegedly smuggled from the US by an Italian-registered company.

European Voice has learned the name of the firm but cannot disclose it for legal reasons.

The investigation is being led by Sebastiano Sorbello, chief prosecutor in the north-western Italian region of Asti, who is working closely with OLAF officials in Brussels.

A source close to Sorbello said the probe concerns an elaborate cross-border operation, believed to involve around 200 people.

The estimated €24 million loss in excise duties and other revenues occurred between 1995 and 1999. 'Almost 244 million cigarettes seem to have disappeared,' said the source, adding that the figure does not include allegedly illicit trading in other products which the network may also have undertaken.

Sources familiar with the inquiry say suspicions about the network's trading activities were aroused because of unusual movements of goods.

Documents purportedly showed that the firm was exporting American chocolate from Genoa to Miami - in non-refrigerated containers. It also claimed to be flying batches of herring from Amsterdam to Genoa, Italy's chief seaport. Investigators allegedly found cigarettes in the containers.

The company at the centre of the probe had documentation showing that it was also transporting cigarettes from Portugal to Savannah in the US state of Georgia. Monitoring revealed, though, that the cigarettes were never delivered in America but instead found their way to Ukraine.

Other paperwork, relating to the export of cigarettes from Portugal to Senegal and Angola, allegedly carried forged customs stamps.

Another significant breakthrough in the case came after a joint investigation by OLAF and the police uncovered evidence of a Belgian link to the network. They found that some 150 lorries had smuggled cigarettes into Britain.

In addition, a plane carrying a large consignment of cigarettes was seized by customs authorities near the Franco-Swiss border. It had earlier been declared empty when it took off from Ostend in Belgium.

Earlier this year, authorities in Poland, Monaco and Italy raided premises connected to the Italian company. These unearthed documents shedding further light on how it appears to have used Portugal as a base for some of its smuggling activities.

One source said that the companies under Sorbello's microscope seem to have been working from various locations to reduce the risk of being caught with large cargoes.

The EU's anti-fraud office OLAF is investigating a cigarette smuggling network which may have cost Member States more than €24 million in lost tax revenues.