Posted on 10/31/2002 9:25:42 AM PST by Tumbleweed_Connection
The European Union has accused the tobacco giant R.J. Reynolds of selling black-market cigarettes to drug lords and mobsters, helping them launder profits from their illegal activities.
A lawsuit describes R.J. Reynolds's allegedly corrupt business dealings in Europe and Latin America, including with members of the Italian Mafia and Russian organised crime, Colombian drug cartels and senior government officials in the Balkans.
The suit, filed in New York on Wednesday, paints a world in which contraband cigarettes have become the currency of choice in Europe for money laundering, and where one of the world's big tobacco companies aided and abetted the criminals.
Officials "at the highest corporate level" made it "part of their operating business plan to sell cigarettes to and through criminal organisations and to accept criminal proceeds in payments for cigarettes by secret and surreptitious means", the suit alleges.
A Reynolds spokesman said that "at first glance it appears that this complaint is related" to a case that has been dismissed.
Indeed, the suit continues the EU's legal assault on R.J. Reynolds and other tobacco companies that it claims have cheated member states of billions of taxes over the years, through collusion with smugglers.
The EU's earlier complaint against R.J. Reynolds and Philip Morris was dismissed in February by a federal judge in New York on the grounds that it was barred by the "revenue rule", a centuries old common-law doctrine that generally prohibits foreign governments from collecting tax defaults through US courts. The EU has appealed against the dismissal.
In dismissing the case, Judge Nicholas Garaufis said he would consider a suit based on money laundering violations, rather than tax recovery. In response, the EU filed this suit and is expected to file a similar one against Philip Morris and Japan Tobacco in the coming months.
The latest suit lists bank accounts in Switzerland, Italy, Cyprus, Lichtenstein, the Channel Islands and the Netherlands and identifies wire transfers used as part of money laundering schemes.
The suit also says that R.J. Reynolds entities frequently changed banks where the company was going to receive payments from illicit sales in order to escape detection by US law enforcement. "This process was known within RJR as 'musical banks,"' the suit says.
The lawsuit seeks to recover losses due to money laundering and law enforcement expenses. The complaint does not ask for a specific amount of damages, but it says the EU's losses are in the hundreds of millions.
The suit alleges a marriage of convenience between tobacco officials seeking to expand their markets in Europe, and criminal gangs needing to launder profits from narcotics and weapons trafficking and extortion.
"Throughout the European community, cigarettes and narcotics are routinely part of the same criminal transactions, and the incidence of such violence associated with such trade is rising rapidly around the world," the suit says.
Tinfoil hat alert?
What's new?
How's it working out for 'em?
Once upon a time, they did know what the result would be.
R.J. Reynolds Tobacco Holdings Calls New EU Lawsuit 'Absurd' Source: PR Newswire, 2002-10-31
Intro: We operate our businesses in a legal, responsible manner. Any allegations that we were involved in, or aware of, money laundering, conspiracy or any other illegal activities are completely absurd. We believe this suit should be dismissed, as were the other two EU cases filed in U.S. court.
You did.
I still say that the EU just wants a cut similar to the MSA.
Sorry, Joe. I misread your post.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.