Fairfax County police and federal agents have busted a large-scale, million-dollar cigarette bootlegging ring with ties to New York City and China, federal court records show.
It’s the fourth such scheme to be uncovered in recent months as federal authorities working closely with Fairfax County police have sought to dam a steady stream of black-market cigarettes traveling from Virginia to the New York City area.
Contraband cigarettes have become big business for organized crime as taxes on smokes in states including New York, New Jersey and Michigan have climbed, but remained steady in states such as Virginia, federal authorities say.
In the latest bust, federal authorities fingered Hock Kee Cheow, 46, also known as “Jeff,” for running a distribution ring in the New York area, charging him with conspiracy to possess contraband cigarettes, according to a sworn statement by a federal agent.
Cheow’s attorney, Kevin Mosley, declined to comment.
According to the statement, Cheow met repeatedly with a Fairfax County detective and federal agents for more than a year. Authorities said Cheow bought cigarettes that carried no legal tax stamp in Virginia and had them shipped to New York City and New Jersey.
After first meeting in July 2007, law enforcement agents arranged to sell Cheow 2.4 million unstamped cigarettes, telling him they could get a full range of Phillip Morris products and limited Newport products, the statement said.
Two weeks later, a federal agent and Fairfax County detective met Cheow at a public storage facility in Hillside, N.J. Cheow, the statement said, handed over $215,800 in $100 bills and the law enforcement agents passed him a key to the storage unit.
In October 2007, a Fairfax County Sheriff’s Office lieutenant met with Cheow in Brooklyn, where Cheow paid $540,000 for more than 5.8 million cigarettes the lieutenant had left in a truck, the statement said. Soon after, Cheow’s associate was pulled over and arrested by New York City police.
Later, Cheow also sold the undercover authorities more than 400,000 counterfeit Virginia tax stamps for 6 cents each, the statement said. He told authorities the tax stamps were printed China. Cheow was taken into custody in November, soon after authorities obtained the stamps.
Virginia taxes are about 80 cents a pack, court records said.
Cheow also stood to make big profits on the unstamped cigarettes shipped to New York City, where taxes add $4.25 to each pack.
