Blümel: "Customs investigation into international cigarette mafia reaches final conclusion" – Illegal production machine destroyed 22.66 million cigarettes impounded, with loss of over EUR 24 million in EU taxes
"Following the trial judgment last year, and with completed destruction of production machinery, the international investigation by customs investigators, conducted meticulously over many years, has now reached its final conclusion," affirms Finance Minister Gernot Blümel, reporting on the destruction, which took place on 26 May 2021, of an illegal cigarette production machine impounded in 2016.
In autumn 2016 investigators from Customs Office Austria at Eisenstadt Customs Office at Vienna Airport had uncovered a production facility for illegal cigarettes in the basement of a freight forwarding agent in eastern Austria.
As the investigations leading to the seizure and those that followed revealed, the international group of perpetrators responsible produced untaxed and counterfeit cigarettes bearing the brands 'Marlboro', 'Marble' and 'Memphis'. The illegal cigarettes were largely introduced onto the market in Germany, the Netherlands and Austria, as well as the UK.
During the course of the entire investigation period - from 2011 until 2019 - a total of 22.66 million cigarettes were confiscated (3.46 million in Germany, 8.4 million in Austria, 6 million in Slovakia, 4.8 million in the Netherlands) and 73 tonnes of fine-cut tobacco (16 tonnes in the Netherlands and respectively 10 tonnes in the Czech Republic, Germany, Hungary and Slovakia, as well as 17 tonnes in Austria). In addition, two cigarette manufacturing machines in Belgium, and one machine in each of Slovakia, Hungary and the Netherlands, plus a further machine in Austria, were impounded. Besides the illegal manufacturing operations, in total 25 properties in Germany, Belgium, Hungary, Slovakia and the Netherlands were searched by national customs investigators, as well as four properties in Austria. In addition to electronic data media and written records, numerous mobile phones and sim cards were seized during these searches. All items seized were attributable to the same network of perpetrators.
29 suspects both in Austria and abroad, main suspect based in Vienna
The preliminary investigation was conducted against 29 suspects both in Austria and abroad. The principal suspects were a 45-year-old male from Vienna, a 41-year-old Israeli national, resident in Hungary, a 34-year-old from Cologne, Germany, a 55-year-old male from Leverkusen in Germany, and a 35-year-old from Rödermark, Germany. The suspects made substantial logistical and organisational investments in order to procure the cigarette manufacturing machinery as well as the raw materials needed for production (tobacco, paper, etc.); they also recruited workers in Bulgaria for the illegal manufacture, and organized sale of the untaxed cigarettes. The fine-cut tobacco and other manufacturing materials were obtained from the Czech Republic, Bulgaria, Hungary and Slovakia. The offenders procured the machinery for cigarette production and packaging from Poland. All the network's illegal production facilities were at all times principally organised by the main Austrian suspect, irrespective of their location.
Network in the sights of investigators over many years
The same network was in the sights of investigators during similar seizures in 2011, 2012, 2013 and 2015. In 2011, the first substantial seizures of cigarettes led Austrian customs investigators onto the trail of the culprits. The investigation findings meant that, subsequently, a vital contribution could be made to the detection of offences in Slovakia (2012) and in the Netherlands (2013). In July 2015, in an Austrian collaboration between Bulgaria, Belgium and Austria, a further illegal production site in Belgium was uncovered. Before the perpetrators there had even begun with production, two new cigarette production lines and 13 tonnes of tobacco were seized by the Belgian authorities as a result of information provided by Austrian customs investigators. The professional investigative work by Austrian customs investigators and international cooperation with colleagues across the whole of Europe, as well as with the European authorities Europol and Eurojust, led to a raid on the illegal cigarette production facilities in Wiener Neustadt in 2016. Within the framework of a targeted initiative jointly with Hungarian customs, in addition to this facility, at the same time a cigarette production line in Hungary was also intercepted.
Charges were filed against the main Austrian defendant by Eisenstadt Customs Office at Vienna Airport with the Central Public Prosecutor's Office for Combating Economic Crimes and Corruption (WKStA). In June 2020, for offences committed in Austria, the defendant, from Vienna, was handed down a custodial sentence of two years and a fine of EUR 650,000 by the Vienna Regional Court. The judgment is non-appealable.
Illegal production line destroyed
Following the end of the trial in June 2020 and further to delays caused by the pandemic, the illegal cigarette production facility and packaging line uncovered in Austria in 2016 could now finally be destroyed, on 26 May 2021, and thereby be rendered inoperable. According to the conclusions of the investigation, the production machine had been used for a comparatively short period in Austria - just six months - for the manufacture of illegal counterfeit cigarettes. "It was at this point that Austrian customs investigators got in the way of the gang's plans, thereby thwarting the network's further criminal intentions," affirms Finance Minister Blümel, proud of what he describes as an "important victory in the fight against international organised crime. Cases like this clearly show that smuggling, receiving stolen goods and fraud know no borders – and so our customs administration is taking strong action jointly with colleagues and authorities across the whole of Europe!"