Posts Tagged ‘New York Times’

NY Cigarette Wholesalers Violate CCTA

August 28th, 2012 1 comment

The battle between New York and its federally recognized tribes over the taxation of cigarettes continues.

In the most recent development, other players involved were on the losing end of a recent ruling in federal court. The judge held that wholesalers failed to collect New York City cigarette tax on the sale of millions of cigarette cartons to tribal retailers located on reservations in New York. The New York Times estimates the wholesalers could have to pay penalties up to $15 million to New York City.

New York City brought this action alleging that the wholesalers violated federal law. The Contraband Cigarette Trafficking Act prohibits persons from selling “contraband cigarettes,” which are defined as “a quantity in excess of 10,000 cigarettes, which bear no evidence of the payment of applicable State or local cigarette taxes in the State or locality where such cigarettes are found, if the State or local government requires a stamp, impression, or other indication to be placed on packages or other containers of cigarettes to evidence payment of cigarette taxes.”

Defendant wholesalers Mauro Pennisi and Gutlove & Shirvint each sold from May 2008 to January 2011 more than 10 million cartons to Indian retailers mostly on the Poospatuck Reservation, where fewer than 500 people live. Although cigarette packs sold to tribal members on reservation are exempt from NY cigarette tax, packs sold off-reservation in NYS are taxable.

New York City asserted that the cartons sold by the wholesalers were trafficked into New York City without payment of the New York City cigarette tax and re-sold. The judge ruled that New York City met its burden of proof to establish that the wholesalers should have known the vast majority of the untaxed cigarettes sold to the tribes were re-sold to non-tribal members.

This case will only further encourage tribes located in New York to manufacture their own cigarettes. Whether or not NYS will again seek to stop such activity remains to seen.

Rotten Fruits of a Former Assemblyman’s Labor

July 25th, 2012 1 comment

In 2004, Jimmy Meng made history after becoming the first Asian American elected to the New York State legislature. His daughter, Grace Meng, followed in her father’s footsteps by winning the 2008 election for the 22nd assembly district in Flushing, Queens. She still holds the position today and is now seeking a seat in Congress as the Democratic nominee for New York’s 5th congressional district.

Not all is well with the Meng family, however. Yesterday, Jimmy Meng was arrested on federal wire charges, reports the New York Times.

Allegedly, in late 2011 Meng solicited $80,000 from a friend facing criminal tax charges in Manhattan. In exchange, Meng promised to bribe federal prosecutors in order for his friend to receive a more lenient sentence.

Yesterday, Meng’s friend showed up at Meng’s lumber yard in Flushing with a fruit basket and handed it over to Meng. Inside the basket was $80,000 cash.

After Meng was arrested, federal authorities sought to turn him into a cooperating witness as part of a larger corruption investigation, according to the NY Daily News.

He refused the offer, and now faces up to 20 years in prison.

The complaint notes there is no evidence Meng actually approached any federal prosecutors regarding his friend’s tax charges.

Meng’s daughter is doing what she can to minimize the blow to her campaign, saying, “I am independent of my father—always have been, always will be.”

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