E. Shore men get probation for cigarette trafficking

Two Eastern Shore men were sentenced to probation Monday after pleading guilty in federal court to trafficking thousands of cartons of contraband cigarettes.

Senel Cuce, 29, co-owner of the Sunrise Family Market and Pizzeria in Exmore, and his manager, Ali Riza Zulam, were placed on five months of home detention with electronic monitoring.

Both immigrated here from Turkey. Zulam, 41, of Poc omoke City, Md., obtained permanent residency and is married to a U.S. citizen so he likely will not be deported.

Cuce, however, has not obtained residency and will face deportation proceedings. Cuce used to live in Norfolk, where he ran Sunrise Pizzeria on Tidewater Drive several years ago. He now lives in Melfa.

The two admitted selling dozens of cartons of cigarettes at a time to black marketeers who would deliver them to New York and Pennsylvania, where cigarette taxes are much higher than in Virginia. The two were arrested earlier this year after selling contraband cigarettes to undercover federal agents.

Agents from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives last year became concerned about the store when they noticed a dramatic increase in cigarette sales, which the agency tracks. An undercover agent posed as a cigarette smuggler from Pennsylvania, buying 90 cartons that he said he planned to resell in Philadelphia without paying that state’s taxes.

ATF surveillance also revealed a number of contraband cigarette sales to smugglers. In one instance, Zulam sold 1,200 cartons to two New York smugglers, court records say.

In all, Cuce and Zulam sold 2,300 cartons of contraband cigarettes from the store between last September and March, earning about $10 profit per carton.

In court Monday, U.S. District Judge Raymond A. Jackson ordered the pair to pay $38,000 in restitution, the amount equal to the tax losses to Pennsylvania and New York.

The ATF has made dozens of arrests in Virginia over the past few years for black-market cigarette sales. The black market for cigarettes is highly lucrative, agents say. A $25 carton here could sell for $75 in New York.

The tax difference between southern and northern states makes it even more profitable. Virginia has the third-lowest cigarette tax in the country; New York has the third-highest.

After the Sept. 11, 2001, attacks, federal agents discovered that proceeds from contraband cigarette sales were funding terrorists. Though no such links were discovered in this case, the ATF has increased its investigations into illegal cigarette sales since then.

In 2002, a group of men in North Carolina were discovered funneling millions of dollars from contraband cigarette sales to Hezbollah, a terrorist group based in Lebanon. Federal agents said the ring smuggled $8 million in contraband cigarettes from North Carolina to Michigan. It s leader, Mohamad Hammoud, who was caught on wiretaps speaking to a Hezbollah commander, is serving a 155-year prison sentence.

The smuggling problem may be worse in Virginia, federal officials said.

“Virginia has experienced an influx of organizations and individuals operating independently, known as runners, who are buying large volumes of cigarettes in Virginia and transporting these cigarettes out of state for resale,” federal prosecutors said in a court filing.

The problem appears particularly acute in the Richmond area, where dozens of arrests have been made in recent years. ATF agents grew so concerned at the number of traffic stops on Interstate 95 where police would discover trunks stuffed with cigarette cartons, that the agents set up an undercover store in King William in 2006.

Undercover agents staffed the store and followed customers as they delivered cigarettes to northern states.

source: http://hamptonroads.com/

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