Hartford Man Charged With Trafficking Illegal Cigarettes

HARTFORD, CT — An illegal cigarette trafficking operation yielded more than 3,600 cartons of contraband cigarettes and other fraudulent goods, and resulted in the arrest of a Hartford resident.

Department of Revenue Services Commissioner Kevin B. Sullivan said the bust is the largest in Connecticut history.

“DRS special agents shut down a lucrative trafficking operation that was a significant distributor of untaxed cigarettes in Connecticut,” Sullivan said in a statement.

Wilberto D. Diaz, AKA Junior, 49, of 48 Whitmore Street, Hartford, was arrested by the agency’s Criminal Investigations Division, Master Settlement Agreement (MSA) Tobacco Enforcement Unit. He was charged with sale of cigarettes without a license, operation without a valid sales and use tax permit, possession/sale of more than 100 cartons of untaxed cigarettes, fraudulent stamps and possession/sale of untaxed tobacco products.

Diaz was released on a $25,000 non-surety bond, and is scheduled to appear in New Britain Superior Court Sept. 26.

He faces possible fines of up to $8,000 and 21 years, 6 months in jail, according to Sullivan.

“Honest retailers are at a competitive disadvantage. When any taxed product is more expensive, there is an illegal cheaper alternative somewhere,” Sullivan said. “We have put more resources behind arresting smugglers and illegal tobacco sellers but the penalties need to be stiffer.”

The seizure of 3,601 cartons represents the largest single seizure of contraband cigarettes in Connecticut. Also seized were thousands of fraudulent Connecticut and New York tax stamps, tax stamps from Michigan, a small amount of untaxed cigars and over $9,000 in cash, Sullivan said.

The uncollected excise tax the state lost on the seized cigarettes, other tobacco products and counterfeit tax stamps totaled $190,349 on this seizure alone, the commissioner added.

Diaz stated he sold 800 cartons a week for over three years, which equates to almost $4.8 million in lost excise tax alone. Depending on how the products were sold, the state could also lose the sales tax of 6.35 percent, Sullivan said.

In 2011, Diaz pleaded guilty to a misdemeanor charge of illegal sale of unstamped cigarettes. He was fined $500, according to judicial records.

The current investigation began over a year ago, when the DRS received information, from various sources, alleging that Diaz was distributing untaxed and fraudulently stamped cigarettes throughout the area. During the investigation, agents determined that Diaz purchased large amounts of contraband cigarettes from out of state, then transported the cigarettes back to Connecticut, where he would affix fraudulent Connecticut tax stamps to them and resell the cigarettes to retail locations throughout the cities of Hartford and New Britain. Some of the cigarettes were from Virginia, North Carolina, Indiana and Michigan, Sullivan said.

The investigation is ongoing, and further arrests are anticipated, Sullivan said.

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