UPDATE: Miss. auditor: Warehouse found with untaxed cigs

Published 12:33 am Friday, April 17, 2009

Mississippi investigators this week found and locked down a warehouse with about 1 million cartons of “contraband” cigarettes and small cigars that lacked a required state tax stamp, state Auditor Stacey Pickering said Wednesday.

No arrests have been made, but Pickering said criminal charges such as tax evasion are possible once the people who stored the tobacco products are found.

Pickering wouldn’t disclose the warehouse location because he said an investigation continues. He said the site is under electronic surveillance.

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As for finding the identity of the person who stored the cigarettes and cigars, Pickering said: “We’re confident that that will be something we can do with relative ease as this investigation moves forward.”

Pickering and state Tax Commissioner Ed Morgan spoke at a news conference in a state office building, where several cartons of seized cigarettes were displayed.

On a shipping box for Vaquero small cigars were the words, “Made in Colombia.” Boxes of Ice brand cigarettes noted that the products were “Made in USA.” Another shipping box for King Mountain cigarettes had the words, “Native American owned and manufactured.”

Investigators from the auditor’s office and the State Tax Commission secured the warehouse and its contents Tuesday.

Tobacco products are required to get a Mississippi stamp within 72 hours of arriving in the state. Pickering said the cigarettes and cigars sat in the warehouse longer than that.

Investigators are trying to determine where the cigarettes were to be sold, Pickering said. He estimated the state would lose $1.5 million in tax collections and the federal government would lose $8 million.

“Today, we very well have more questions, as you do, than we have answers,” Morgan said.