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Cigarette smuggling suspect pleads guilty  

A member of a ring that allegedly traded millions of dollars in cash, cocaine, heroin, automobiles and other goods for untaxed cigarettes pleaded guilty in federal court in Richmond on Wednesday.

Court documents allege that operation made at least $8.2 million from 2009 until last October. Many of the activities and some of the arrests took place in the Richmond area and elsewhere in Virginia.

In addition to cash, the participants allegedly used prescription erectile dysfunction pills, thousands of grams of crack cocaine, heroin, gold jewelry and BMW and Lexus SUVs to buy more than 100,000 cartons of cigarettes that were sent to New York for resale.

Salah Morshed, a U.S. citizen born in Yemen and arrested in New York, pleaded guilty Wednesday to one count of conspiracy to traffic in contraband cigarettes and to one count of conspiracy to launder money.

He will face up to 25 years in prison when sentenced on May 11

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Man pleads guilty to role in untaxed cigarette ring 

A member of a ring that allegedly traded millions of dollars in cash, cocaine, heroin, automobiles and other goods for untaxed cigarettes pleaded guilty in federal court in Richmond today.

Court documents allege that operation made at least $8.2 million from 2009 until last October. Many of the activities and some of the arrests took place in the Richmond area and elsewhere in Virginia.

In addition to cash, the participants allegedly used prescription erectile dysfunction drugs, thousands of grams of crack cocaine, heroin, gold jewelry, BMW and Lexus SUVs to buy more than 100,000 cartons of cigarettes that were sent to New York for sale.

Salah Morshed, a U.S. citizen born in Yemen, pleaded guilty to one count of conspiracy to traffic in contraband cigarettes and to one count of conspiracy to launder money.

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Capitol briefs: Senate panel OKs anti-smoking bills  

Smoking would be prohibited on public school grounds and in government-owned and -leased buildings under two bills approved Tuesday by the Senate Local Government Committee.

Senate Bill 467, sponsored by Sen. Ralph S. Northam, D-Norfolk, would expand the prohibition on smoking in school buildings to include the grounds of the schools and the inside of any public school administration building. It passed the committee -- the only committee in the Senate with a majority of Democrats -- on a 12-3 vote.

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Restaurant Enacts Winter Smoking Ban  

Smokers have been snuffed out at a Woodbridge restaurant, at least for winter.

The Electric Palm restaurant sits on the Occoquan River at the Prince William Marina, and this past Sunday began a no-smoking policy effective for the entire winter season.

Smoking has always been allowed in the restaurant’s downstairs Tiki Bar, which sits away from the dining area and is open and well ventilated during the spring and summer months, making it the ideal place to for patrons to smoke.

When winter came, the restaurant owners closed off the bar to the elements to keep in heat, but they continued to allow smoking at the bar. This led to a bevy of complaints from smokers and non-smokers alike, with the former claiming that they were restricted in their ability to smoke on the premises, and the latter worried about their dining atmosphere and health.

Roxanne Blum, an owning partner at the Electric Palm, worked to find a compromise. First

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Bill changing status of roll-your-own cigarette operations clears panel  

Legislation that would declare roll-your-own cigarette operations to be manufacturers, rather than retailers, and make them meet the same tax and regulatory requirements as major cigarette producers, will advance to the full House of Delegates after sailing out of a committee this morning.

On a bipartisan, unanimous vote, HB 314, sponsored by Del. R. Lee Ware Jr., R-Powhatan, cleared the House Finance Committee with an amendment exempting roll-your-own machines purchased for personal use.

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• A Rolling Debate: Consumer shops versus big manufacturing  

The rolling machines and cheaper smokes have put Tobacco Direct and stores like it in Virginia and other states at the center of a fierce, national controversy that highlights the complexities surrounding tobacco regulation and taxation.

That debate is now playing out in the Virginia General Assembly, with lawmakers so far voting against the roll-your-own businesses and for the views of tobacco companies such as Henrico County-based Altria Group Inc., the parent company of top U.S. cigarette maker Philip Morris USA, who say the shops are evading taxes and regulation.

But Tobacco Direct's co-owner and manager, Eddie Siu, said his Chesterfield County store is offering convenience and affordability to people who like to roll their own smokes.

"We are not trying to get more people to smoke," Siu said. "Instead, we are trying to offer savings for people who already smoke and might be struggling in this economy." . . .

Altria argues that the roll-your-own cigarette shops that have opened in Virginia and other states are taking advantage of legal loopholes to avoid excise taxes and federal and state regulations on cigarettes.

The company is backing legislation that would declare roll-your-own operations to be cigarette manufacturers, rather than retailers and make them meet the same tax and regulatory requirements as the major cigarette producers. . . .

Opposing the legislation is RYO Machines LLC, a company in Ohio that builds and sells roll-your-own machines, along with retailers such as Tobacco Direct that have installed the machines in their stores at a cost of $32,500 each. At least 18 machines are now operating in Virginia in 10 retail stores.

The roll-your-own businesses argue the legislation is simply intended to eliminate them, pushing a small but growing source of competition for major cigarette brands out of the market.

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• 'Roll-your-own' cigarette sellers dealt blow 

A House of Delegates subcommittee recommended approval Friday of legislation that would declare retail businesses with roll-your-own cigarette machines to be manufacturers.

The legislation is backed by major cigarette companies and a host of trade groups, but it has faced vocal opposition from a few tobacco shop owners in Virginia who say it would put them out of business. An Ohio company that makes and sells roll-your-own machines is fighting the legislation.

Altria Group Inc., the parent company of cigarette maker Philip Morris USA, argues the legislation is needed because roll-your-own businesses are not subject to cigarette excise taxes and other regulations imposed on large cigarette manufacturers.

"The purpose of the bill is to ensure that anyone making cigarettes in a retail establishment has to play by the same rules that everyone else in the business has to play by," John Rainey, a lobbyist for Altria, told the House finance subcommittee.

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Roll-your-own cigarettes is lighting up a fight in Richmond  

It's easy to see why shops like Tobacco Direct have become popular in other states. The price for 200 cigarettes produced on the Roll Your Own machine here is about half the cost of a carton produced by a traditional manufacturer.

Higher state and local taxes, fire safe papers and the tobacco settlement all add to the cost of retail cigarettes.

"We think everyone who operates a cigarette manufacturing facility in Virginia should play by the same rules, be subject to the same regulations and pay the same taxes on the manufactured cigarette products that all of the industry pays," said David Sutton of Philip Morris USA.

State lawmakers are now considering legislation that would regulate tobacco shops with the roll-your-own machines as manufacturers.

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Bill targeting roll-your-own cigarette shops advances 

A General Assembly committee advanced legislation Wednesday that would declare retail businesses with roll-your-own cigarette machines to be cigarette manufacturers, subject to the same taxes and regulations as cigarette companies.

The legislation is backed by the largest U.S. tobacco company, Henrico County-based Altria Group Inc., and other major cigarette makers and trade groups.

Opposing it are retailers who have installed roll-your-own machines in their stores and an Ohio company that makes and sells the machines. They argue the legislation is an attempt by big cigarette companies such as Altria to eliminate competition.

"If this bill would pass, it will put me completely out of business," said Eddie Siu, co-owner of eight Tobacco Direct retail stores in Virginia that have roll-your-own machines, including a recently opened store on Midlothian Turnpike.

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Tobacco tax rise snuffed out  

Smokers can breathe -- or wheeze -- a sigh of relief after legislation to raise the state tax on tobacco products died in a House subcommittee on Friday.

House Bill 160, introduced by Delegate Patrick A. Hope, D-Arlington, would have increased Virginia's tax on cigarettes from 30 cents per pack to $1.45 per pack -- a 383 percent boost.

That increase would have brought Virginia's tax up to the national average.

The bill also called for raising the tax on other tobacco products from 10 percent of the wholesale price to 50 percent.

HB 160 had been referred to the House Finance Committee. On a voice vote Friday, a subcommittee of that panel recommended that the bill be tabled.

"I'm disappointed, but I can tell you I'm not surprised," Hope said.

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Loophole could go up in smoke 

But the stores that have such machines aren't registered as cigarette manufacturers--they argue that they are not manufacturers--and they pay taxes on the tobacco as pipe tobacco, which is a lower tax than that on cigarette packs.

The bill, sponsored on the Senate side by Sen. John Watkins, R-Powhatan, would change that, declaring the store owners to be manufacturers of cigarettes and regulated accordingly.

"The end product would be a cigarette," Watkins told the committee yesterday, passing out to senators sample packs of regular, commercial Marlboros and the RYO equivalent. "This legislation just tries to provide for a level playing field."

John Rainey, representing Altria (which owns cigarette manufacturer Philip Morris) said the common conception of roll-your-own cigarettes involves a person sitting in their own home, hand-rolling cigarettes--not those made by a machine that can spit out a 200-cigarette carton in less than 10 minutes.

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Bill targeting roll-your-own cigarette shops advances 

A General Assembly committee advanced legislation Wednesday that would declare retail businesses with roll-your-own cigarette machines to be cigarette manufacturers, subject to the same taxes and regulations as cigarette companies.

The legislation is backed by the largest U.S. tobacco company, Henrico County-based Altria Group Inc., and other major cigarette makers and trade groups.

Opposing it are retailers who have installed roll-your-own machines in their stores and an Ohio company that makes and sells the machines. They argue the legislation is an attempt by big cigarette companies such as Altria to eliminate competition.

"If this bill would pass, it will put me completely out of business," said Eddie Siu, co-owner of eight Tobacco Direct retail stores in Virginia that have roll-your-own machines, including a recently opened store on Midlothian Turnpike.

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Del. Hope's Cigarette Bill Meets Expected Demise in House of Delegates  

For the second year in a row, Del. Patrick Hope’s push to nearly quintuple Virginia’s excise tax on cigarettes met an early death in the General Assembly session.

A subcommittee of the House Committee on Finance killed Hope’s 2012 bill, which would have funneled most of the funds brought in by the tax increase to localities, for use in rebating car-tax bills.

In introducing the legislation, Hope (D-47th) had expressed cautious optimism that it was a way around the general dislike for new taxes among the General Assembly’s leadership.

“What has stood in our way in the past has been a firm opposition to any tax increase of any kind,” Hope said in a Jan. 17 statement announcing his measure.

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Virginia's Tobacco Tax Will Remain Country's Lowest 

House Bill 160, introduced by Delegate Patrick A. Hope, D-Arlington, would have increased Virginia’s tax on cigarettes from 30 cents per pack to $1.45 per pack – a 383 percent boost.

That increase would have brought Virginia’s tax up to the national average. The bill also called for raising the tax on other tobacco products from 10 percent of the wholesale price to 50 percent.

HB 160 had been referred to the House Finance Committee. On a voice vote Friday, a subcommittee of that panel recommended that the bill be tabled.

“I’m disappointed, but I can tell you I’m not surprised,” Hope said.

Virginia has the second-lowest tax on cigarettes in the country. Only Missouri’s tax, at 17 cents per pack, is lower. New York has the highest state tax on cigarettes – $4.35 per pack. In addition to the state taxes, the federal cigarette tax is $1.01 per pack.

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Tax hike on tobacco snuffed out 

Smokers can breathe - or wheeze - a sigh of relief after legislation to raise the state tax on tobacco products died in a House subcommittee on Friday.

House Bill 160, introduced by Delegate Patrick A. Hope (D-Arlington), would have increased Virginia's tax on cigarettes from 30 cents per pack to $1.45 per pack - a 383 percent boost.

That increase would have brought Virginia's tax up to the national average. The bill also called for raising the tax on other tobacco products from 10 percent of the wholesale price to 50 percent.

HB 160 had been referred to the House Finance Committee. On a voice vote Friday, a subcommittee of that panel recommended that the bill be tabled.

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