New York City Seeks Millions From FedEx for Cigarette Smuggling

     MANHATTAN (CN) - New York City filed a RICO lawsuit against Federal Express, accusing it of defying the state attorney general by shipping "several tons" of contraband, untaxed cigarettes ordered via Internet or regular mail from the Shinnecock Smoke Shop.
     The city sued FedEx Ground Package System and Federal Express in Federal Court.
     The Shinnecock Nation is not a party to the complaint.
     FedEx's sneakery deprived New York City of $15 in tax for each carton of cigarettes it delivered in the Big Apple, the city says. It seeks treble damages, under RICO, for the $15 tax it should have received for each carton FedEx delivered there.
     The city also seeks appointment of a special master and penalties under the Contraband Cigarette Trafficking Act, the Prevent All Cigarette Trafficking Act, and an injunction and abatement of public nuisance under New York Public Health law.
     "In February 2006, to resolve an investigation by the New York State Attorney General (the 'NYAG') into FedEx's illegal residential deliveries of cigarettes, FedEx agreed to cease such deliveries in New York, an agreement subsequently expanded to include cigarette deliveries anywhere in the United States," the city says in the lawsuit. "Even while negotiating that agreement with the NYAG, and thereafter in defiance of the agreement, but more to the point, in violation of several federal and state statutes, FedEx knowingly shipped thousands of cartons of unstamped cigarettes to residential customers, partnering with a cigarette trafficking enterprise known as Shinnecock Smoke Shop, located on the Shinnecock Indian reservation in Southampton, New York. Between 2005 and 2012, FedEd delivered several tons of contraband cigarettes ordered over the Internet or by mail from Shinnecock Smoke Shop by consumers throughout the country, including New York City and State."
     The city claims that FedEx concealed the shipments for lucre, "despite assurances to the contrary" while it was negotiating with the state attorney general.
     It claims FedEx did similar things with untaxed cigarettes from a California tribe.
     The city is represented by its corporation counsel Michael Cardozo.