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2 Investigators: Law Enforcement Cracking Down On Pirated Cigarettes

(CBS) -- A pack of cigarettes in Chicago can cost as much as $15 and with the soaring price the trafficking of contraband cigarettes is way up as well.

They're called unstamped or untaxed cigarettes, smuggled in from states like Indiana and Missouri where cigarette taxes are much less. 2 Investigator Pam Zekman reports on a new push by law enforcement to crack down on pirated cigarettes.
It's called operation "Check the Stamps" and over a 60-day period the Chicago Department of Business Affairs and Consumer Protection issued 620 tickets to 165 Chicago businesses for selling illegal cigarettes.

The 2 Investigators went along to three convenience stores that were part of the city's sting operation, and it didn't take long to find some contraband.

"Here we go, here's a whole carton," said city investigator Dave Madlener, after discovering a cache of illegal cigarettes hidden in a zipped up comforter bag.

The cigarettes were smuggled in from Missouri where taxes are only 17 cents a pack, compared to $7.17 in Chicago.

"They're not paying the Chicago tax or the Cook County tax and in this case they're not paying Illinois tax," said Madlener.

The retailers can then sell the cigarettes for a much higher profit margin by not paying the Illinois and Chicago taxes.
"So they're buying cheap and selling high," said Assistant Business Affairs and Consumer Protection Commissioner, Sherri Cianciarulo.

"We've found them [unstamped cigarettes] in the back of toilet tank, we might find them in an ATM machine, we'll find them in secret compartments," added Madlener.

At one convenience store, the unstamped cigarettes are so valuable they're hidden in a safe.

"We take a picture that's the evidence that we need that they've got the contraband cigarettes in their safe," Madlener said.

"We're doing everything in our power to make sure these businesses are not in possession of unstamped cigarettes," Cianciarulo remarked.

The search for the illegal cigarettes can turn into a kind of treasure hunt for the city investigators. At another convenience store, unstamped cigarettes were found in a secret room hidden behind drink coolers.

With an increase in the city tax last year, the total tax paid for a pack of cigarettes in Chicago is "the highest in the nation," said Brian Richardson, Deputy Public Health Commissioner, an effort to discourage smoking, especially underage smokers.

"We know from all the data over decades that the higher the taxes on cigarettes go, the lower rate of smoking for people, especially young people," Richardson said.

City officials say they hope consumers will report the sale of pirated cigarettes.

"Just call 311 and report it and we'll send out an inspector and make sure the store is complying with the law," said Chicago Department of Public Health Dep. Commissioner Brian Richardson.

Or you can go to to fill out a report and find out about illegal cigarettes sales that lead to citations affirmed by an administrative hearing officer.

The three stores involved in this report were issued 22 tickets for that day. The fines for the violations could amount to as much as $67,000. None of the three store owners would talk to us about the city's findings.

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