City and state authorities on Wednesday announced a joint lawsuit against UPS, alleging the company illegally shipped close to 700,000 cartons worth of illegal, untaxed cigarettes throughout New York over a period of four years.
The $180 million suit filed in Manhattan federal court was brought by state Attorney General Eric Schneiderman and the city’s top lawyer, Corporation Counsel Zachary Carter, who say UPS violated not only state and federal laws but also its own settlement agreement – entered into with the attorney general’s office back in 2005 – in which UPS agreed to cease illegal cigarette deliveries.
Authorities say many of the deliveries came from shippers known to traffic in illegal cigarettes, companies with names like Tobacco by Mail and Nora’s Tax-Free Cigarettes.com
"Not knowing that those companies were shipping cigarettes through your parcel service should essentially disqualify you from running a large corporation. UPS's slogan used to be 'What Can Brown Do For You?' Well, Brown can obey the law and stop delivering illegal cigarettes," Schneiderman said.
UPS denies the allegations, saying in a statement, “Since 2005, UPS has continued to work with regulators on this issue. In fact, UPS agreed to stop delivering cigarettes to consumers nationwide at that time – a policy that went beyond the requirements of federal and state law. UPS tobacco policy strictly prohibits the shipment of cigarettes to consumers and unlicensed dealers or distributors, and we terminate service under that contract program if that policy is violated."
Authorities, meanwhile, say the illegal shipments cost the city and state a combined $34 million in lost tax revenue, and they allege that UPS’s own records show some of the deliveries had been handed to children.