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Lorillard Purposely Supporting Illegal Cigarette Trade, Says NYC

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"If Afghanistan is the seed of the heroin trade, then Lorillard is like that with cigarettes," Eric Proshansky, a deputy chief in New York City's Law Department, tells the New York Post. "Lorillard knows its cigarettes are being bootlegged into the city, and they have refused to stop supplying the reservation, and that's because they know . . . [the trade is] boosting their sales tremendously."

While Philip Morris, manufacturer of Marlboro, stopped working with wholesalers that supply Long Island's Poospatuck Indian reservation -- the entity in the City's crosshairs -- back in 2008, an unnamed city official told the Post that Lorillard "consciously oversupplies" the Poospatucks "knowing full well bootleggers buy in bulk and then flood city neighborhoods with unstamped, cheap smokes."

Philip Morris ended its relationship with the Poospatucks when company investigators found one of its distributors, Mauro Pennisi Inc., delivering "millions of cigarettes" to "benches, trees, and light posts," according to a 2008 investigation by the Center for Public Integrity.

But Lorillard continues to insist that “Cigarette manufacturers should not be expected to police the trade in untaxed cigarettes," even though officials say fully 5% of "the national volume of Newports flows through the [Poospatuck] reservation."

Eric Proshansky says black market sales are "absolutely" part of Lorillard's marketing strategy.

"Newport is a big brand in New York City, and so this is a way of getting cheap cigarettes into the city," he tells the Post. "If cigarettes are expensive, people don't buy them."

Proshansky says, "We have spoken to Lorillard on many occasions and asked them to stop supplying the Poospatucks, and they have refused."

However, Lorillard insists that the state and city, which lose a combined $420 million in uncollected taxes due to bootleg cigarettes, are to blame.

"New York has always had the power to shut down the trade in untaxed cigarettes on Native American reservations but has chosen not to do so," said company spokesman Gregg Perry.
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