Philip Morris USA Files Lawsuits Against Retailers Selling Counterfeit Cigarettes

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Philip Morris USA Files Lawsuits Against Retailers Selling Counterfeit Cigarettes

RICHMOND, Va.-- Philip Morris USA (PM USA) filed lawsuits yesterday against retailers selling counterfeit versions of the company’s Marlboro cigarettes.

While conducting its periodic marketplace purchases of cigarettes, the company found each of the named defendants selling counterfeit cigarettes during 2009. Following last week's filing against Mastic, N.Y.-based Sammy's Smoke Shop, PM USA filed three lawsuits yesterday against seven New York and New Jersey state retailers.

They are: in New York, Ashley One Stop Deli in Richmond Hill, 88 Stop & Go Newsstand in Forest Hills, Prospect Park Deli in Brooklyn, 336 Deli and Manhattan Tobacco Grocery in Manhattan and, in New Jersey, Jarzita II Supermarket in Jersey City and New York Deli Grocery in Union City.

Increases in federal, state and local excise taxes have provided new incentives for tax evasion and other criminal activity related to cigarettes, Philip Morris said in a statement.

In New Jersey, the average retail price for Marlboro brand cigarettes is $7.25, of which $3.58 is excise taxes. The average retail price for Marlboro brand cigarettes is $9.64 in New York City, of which $5.26 is excise taxes. The counterfeit cigarettes purchased from the retailers bore no tax stamp or a counterfeit tax stamp, the company said.

"While the illegal cigarette trade in New York is becoming increasingly complex, Philip Morris USA remains committed to taking steps necessary to protect our brands and the legitimate cigarette trade," said Joe Murillo, vice president and associate general counsel, Altria Client Services, speaking on behalf of PM USA.

PM USA said it pursues numerous strategies to address the sale of counterfeit, illegally imported, stolen and untaxed or under-taxed cigarettes. In addition to litigation, these include working closely with law enforcement authorities in New York to address the state’s continuing contraband cigarette trafficking problems and advocating for legislation with more stringent penalties for the violation of laws related to contraband trade in cigarettes.

PM USA supports H.R. 1676, the Prevent All Cigarette Trafficking Act (the PACT Act), introduced by Congressman Anthony Weiner (D-NY), which was scheduled to be considered by the U.S. House of Representatives yesterday.

The PACT Act is designed to bring an end to tax-evading sales of cigarettes and smokeless tobacco products over the Internet and provides the Bureau of Alcohol, Tobacco, Firearms and Explosives with more resources and tools to accomplish this goal, the tobacco company said in a statement. The bill calls for the creation of six regional contraband cigarette trafficking teams, including one in New York City; a new national Tobacco Intelligence Center to monitor and coordinate illegal cigarette trafficking investigations in the United States; and a computer database that would track and analyze information from remote sellers of tobacco products.

"This latest round of counterfeit activity illustrates the need to provide law enforcement authorities with the tools they need to decisively address these problems," Murillo stated. "We strongly support the PACT Act and applaud the sponsors for recognizing the importance of this issue."

Philip Morris USA is an operating company of Altria Group Inc.

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