Watch CBS News

Tax Raids Find Millions Of Dollars In Cigarette Tax Cheating

CHICAGO (CBS) -- Cook County investigators have been raiding stores across the county that have been breaking the law, and ripping off taxpayers of millions of dollars, by selling cigarettes without proper taxes.

CBS 2's Suzanne Le Mignot rode along with authorities during a recent raid.

At a store in Berwyn, a shelf of cigarettes was left bare, after more than 200 packs were confiscated by the Cook County Department of Revenue Compliance Division Investigation Unit. Only four packs in the entire store had the required Cook County tax stamp.

"For every pack that is sold without the county tax stamp, there's $2 lost," Cook County Revenue Department investigator Timothy J. O'Connor said. "You're talking $400 right there alone."

Investigators with the Cook County Department of Revenue joined forces with officers from the Cook County Sheriff's Office to conduct the raids.

Cook County Revenue Director Zahra Ali said, "We actually are using intelligence, surveillance, we have collaboration efforts."

About 800 raids take place each month.

"Roughly a quarter of them result in confiscations," Cook County Board President Toni Preckwinkle said.

"In the last fiscal year, it was a loss of $6 million," she added. "$6 million would make a great deal of difference to our healthcare system, or to our criminal justice system."

Retailers must buy cigarettes from registered wholesalers that affix the tax stamp. Investigators have found retailers often buy cigarettes out of the county, or even out of state, to avoid the tax and make extra money.

At the Berwyn store that was raided, tickets were issued totaling more than $8,000 in fines. Investigators said the location is a repeat offender.

O'Connor said repeat offenders keep breaking the law, because it's so lucrative to avoid the county's cigarette tax.

"You're making millions of dollars by selling unstamped cigarettes," he said.

In another raid, investigators issued more than $13,000 in fines, and found unstamped cigarettes behind the counter in a safe.

"As we've increased the number of our investigations, we've also seen increased compliance," Preckwinkle said.

This year, the county has issued fines totaling more than $1.3 million.

The Cook County Department of Revenue has planned to hire even more investigators in 2013. The goal is to carry out even more raids, at night.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.