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Saturday, December 4, 2021

State Board of Equalization dumps $2 million worth of contraband cigarette and tobacco-related products in Yolo County Central Landfill

Contraband cigarette and tobacco products confiscated over the past 15 years are destroyed in Woodland

On May 20,, the State Board of Equalization (BOE) dumped and destroyed 30 tons of contraband cigarette and tobacco-related products at the Yolo County Central Landfill (YCCL) in Woodland.

The cigarettes and tobacco products were confiscated through search warrants and administrative seizures over the past 15 years and released at the landfill after serving as evidence. This dumping was the largest one-time contraband cigarette and tobacco destruction for the BOE.

Venus Stromberg, a spokesperson for the BOE, explained in an email the reason why YCCL was the chosen location.

“The Yolo County Central Landfill accepts our products and is close to the warehouse where it is kept pending legal or administrative action,” Stromberg said.

According to the press release, the BOE is a part of “Operation Big Pinch,” a collaborative effort between groups such as the United States Attorney’s Office, that investigates crimes involving unpaid excise tax on tobacco products others than cigarettes.

In California, cigarette products have two taxes: an excise tax of 87 cents per pack and a 7.5 percent minimum sales tax.

Stromberg explained that close to $214 million is lost annually due to contraband cigarette and tobacco-related products. The press release stated that the contraband at the YCCL was worth approximately $2 million.

Stromberg also expressed that once tobacco tax case investigations are completed, the product must be destroyed and its destruction certified.

“This is what occurred last Wednesday. [The] news release explains the tonnage was actually 22.9 tons after final weigh-in after the release was issued,” Stromberg said.

When asked why it took 15 years to finally destroy the contraband, Stromberg described how the administrative or court process handling the products may take a long time.

“It often takes a good deal of time for cases to go through the administrative or court process. The products can’t be destroyed until there is a court order to do so, which we must comply with under the law,” Stromberg said.

According to Stromberg, tax avoidance generally happens at the wholesale or distribution level. Ranging from $1.6 million to $13.6 million dollars, the fines are relative to the crime.

“Making people aware of the consequences through publicizing these arrests and sentencings, as well as last week’s event, will hopefully put those who avoid taxes on notice that we and our partners will come after them,” Stromberg said.

To combat the financial losses occurring from contraband cigarette and tobacco-related product sales, Stromberg listed three factors.

“The state recovers the lost tax revenue through administrative fines, restitution and asset forfeiture,” Stromberg said.

Jerome E. Horton, the chairman of BOE, expressed his determination to put an end to the sale of contraband products in a released statement.

“The BOE is determined to keep cracking down on the criminals who don’t pay their fair share…they deprive California citizens of important public services, and put legitimate, hardworking California small business owners at a disadvantage,” Horton said.

Graphic by Jennifer Wu. 

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