Office of the State Treasurer

Tom Vincz
(609) 633-6565

TRENTON -- State Treasurer John E. McCormac and Taxation Division Director Robert K. Thompson announced today that a Toms River businessman is facing criminal charges as a result of tax enforcement efforts focusing on retailers illegally selling cigarettes and cigars to minors.

A grand jury in Ocean County handed up a four-count indictment against Richard Carroll, 48, of Brick Twp., N.J., charging him with selling unstamped cigarettes in violation of the Cigarette Tax Act, a crime of the fourth degree. Carroll was also charged with filing false or fraudulent Sales & Use Tax returns and failure to pay or turn over Sales & Use Tax between January 2001 and December 2004, and with failure to maintain records as required by both the Cigarette Tax Act and the Sales & Use Tax acts with the intent to evade tax, all crimes of the third degree. If convicted, Carroll faces up to 16 years in jail, fines of up to $55,000.00, and restitution of all tax evaded, with interest.

The joint investigation at Towne Stationery, 27 Washington St., Toms River, in June, 2005 by the Division of Taxation’s Office of Criminal Investigation and the Dover Township Police, also resulted in the seizure of 80 packs of cigarettes on which New Jersey’s tax of $2.40 per pack had not been paid, and 173 cigars for which there was no record of payment of the State’s 30 percent Tobacco Products Tax. The investigation was opened after Dover Township Police received numerous complaints that Carroll was selling cigarettes to students of nearby Toms River South High School. Carroll had previously pleaded guilty in municipal court to possession of 421 packs of untaxed cigarettes in May, 2002, and possession of 356 packs of untaxed cigarettes in November, 2002.

Director Thompson noted that cigarettes and cigars smuggled into the state to avoid the appropriate taxes are often sold at prices significantly below the legal fair market price, and are therefore more affordable to high school students and other minors.

This case coincides with an initiative ordered by State Treasurer McCormac to closely monitor cigarette tax law compliance at retail establishments.

New Jersey has worked in coordination with law enforcement agencies to pursue vendors who attempt to sell cigarettes illegally and have launched operations to seize the contraband. During the last fiscal year, 72,838 cartons of untaxed cigarettes were seized worth a retail value of $4.5 million. There were 137 court cases involving cigarette taxes, including 125 cases in which contraband cigarettes were seized.

“Taxation’s enforcement agents have begun inspections of retail establishments frequented by minors to insure that no untaxed cigarette or cigar products are being sold, and that no sales of single cigarettes, referred to as ‘loosies,’ are being made,” said Treasurer McCormac. “It is important for the State to take steps that combat underage smoking and the sale of untaxed cigarettes and tobacco products,” he said.

Director Thompson said any untaxed tobacco products or loose cigarettes will be seized, and the appropriate charges filed.

Treasurer McCormac urged anyone with information concerning untaxed, smuggled, or counterfeit cigarettes or tobacco products to contact the Division of Taxation’s Tobacco Interdiction Program (TIP) Hotline at 609-984-1225.