Federal judge orders UPS to pay $247 million for illegally shipping cigarettes

A federal judge on Thursday ordered delivery giant UPS Inc. pay New York City and the state nearly $247 million in damages and fines for illegally shipping cigarettes.

U. S. District Judge Katherine Forrest handed down the punishment after finding the company liable in a civil case in federal court in Manhattan in March, and says that the firm ignored “red flags” that its brown trucks were used for the transport of untaxed cigarettes from Indian reservations,

The New York state and New York City sued Atlanta-based UPS in 2015. The lawsuit accused of having a culture in which the preferred sales opportunities have a responsibility to the following regulations of the help of New York to enforce tax law.

“We are pleased that the price of almost $247 million to the city and the state reflects the seriousness of the offences in question,” the city’s chief lawyer, Zachary Carter said. “Smoking is a leading cause of preventable death and the city and the state will continue in their efforts to protect the public health.”

On Thursday the decision of the court of the state of $165,817,479 and the city $81,158,135.

In a statement, Attorney General Eric Schneiderman called it a victory for New Yorkers and their public health.

“As the court agreed, UPS repeatedly violated a number of state and federal contraband cigarette trafficking act — as well as her own agreement with the State — by the dispatch of hundreds of thousands of cartons of cigarettes to consumers in New York,” he said.

UPS said it would appeal the decision, calling it “exaggerated and far beyond the bounds of constitutional limits, particularly given the fact that the shipments in question generated around $1 million in revenue.”

The suit claimed that tobacco retailers be located on the north of the state reservation were given discounts for the shipping in volume. It said drivers were allowed to accept iPads and other gifts of the shippers and the account managers, whose compensation is linked to the keeping of large accounts, ignored evidence that some customers sign contracts dealt in cigarettes.

UPS argued it followed the rules and can only do so much to the police what his 1.6 million daily shippers to send in sealed packages.

“New York’s action sought to force the UPS to serve in a quasi-law enforcement role in monitoring, auditing and reporting of the contents of the package, that is not appropriate for a common carrier,” UPS spokesman Steve Gaut said in a statement.

“The Court UPS in full compliance since 2015 and rejected the application for an injunction or the appointment of a monitor,” Gaut said. “Leave New York, and collaborative system to identify and remove illegal cigarette shipments, which worked well for years in favor of a lawsuit seeking a monetary windfall.”

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