Posted on: Friday, November 30, 2001

State raids store again in cigarette tax crackdown

By Curtis Lum
Advertiser Staff Writer

A Chinatown store was raided for the second time in six months yesterday for allegedly selling cigarettes without state tax stamps.

State investigators in May seized more than 1,800 cartons of cigarettes from the Cheung Chau Trading Inc. store at 1290 C-D Maunakea St. The bust was the largest since the attorney general's office began a crackdown on black market cigarettes that do not have the $1 tax stamp.

Yesterday investigators returned to the store and recovered about 1,000 cartons of cigarettes that had no stamp or just half a stamp. A man who had been arrested in the May 22 raid was arrested again yesterday, along with a female salesclerk.

The two face as much as five years in prison and a $10,000 fine if convicted. The business could be fined $50,000, said Attorney General Earl Anzai.

He said a machine puts the stamps on each cigarette pack, but the illegal cigarettes had half-stamps at the edge of each pack. "So it's pretty clear this is intentional, it's not a machine malfunction," Anzai said.

The state this year began holding merchants responsible for ensuring that cigarettes are sold with the tax stamps. The Tax Foundation of Hawai'i had estimated the state was losing more than $20 million a year on uncollected taxes from black market sales.

Anzai said the store was the first repeat offender, but more arrests might be made.

He said he had instructed his staff to return to other stores where cigarettes had been confiscated to see if they were abiding by the law.