A bust of a major organized crime ring that made millions smuggling cigarettes and committing bank fraud in Virginia has resulted in 43 indictments and more than 740 charges, Fairfax County police announced Friday.
An extensive two-year investigation uncovered a sprawling operation with more than 150 suspects engaged in transporting cigarettes from the Richmond area to New York City, writing bad checks, money laundering, and committing shootings and other violent crimes in the Richmond area, officials said.
Authorities there said the ring sold $30 million worth of cigarettes on the black market and created 29 fake businesses in the Richmond area to make bulk purchases of cigarettes, the Richmond Times-Dispatch reported.
“It’s got to be one of the largest organized crime groups we’ve had,” Fairfax County police 2nd Lt. Thomas Harrington said at a Friday news conference. “It is an extremely complex case.”
Harrington said that detectives are still trying to determine where the organization’s profits went but that officials are exploring whether any money funded terrorist groups. The organization was primarily composed of foreign nationals from northern Africa, Harrington said.
The investigation began in January 2015, when a bank investigator in Fairfax County reported to police that a group of 12 to 14 people were engaged in “check kiting,” or writing checks on accounts with no available funds, police said.
Detectives determined the suspects also were fraudulently building up bank credit by making quick deposits and withdrawals, and then using debit cards to rent cars, which they never returned.
In all, police said nine banks in Fairfax County reported losses of more than $620,000. After it was determined that the 12 to 14 people were using multiple addresses in the county and the Richmond area, Fairfax police reached out to the FBI for help.
The probe eventually expanded to include more than 80 suspects. Some were making large purchases at convenience stores, gas stations and other businesses in Henrico and Chesterfield counties, police said.
Police also discovered that some of the rental vehicles were being abandoned in New York City and the Richmond area. Police stopped some of the vehicles in transit and determined that suspects were using them to smuggle cigarettes up the East Coast.
Cigarette smuggling from Virginia to spots in the Northeast has become a major and lucrative crime in recent years. Harrington said a carton of cigarettes costing $50 in Virginia could cost $110 to $120 in New York City because of added taxes and fees.
Among other schemes, smugglers buy cigarettes in the commonwealth and then illegally transport them to New York City, where they are sold below market rate but for a higher price than they were purchased for in Virginia.
In 2011, federal officials estimated that a U-Haul truck stocked with 200 cases of cigarettes could net a smuggler a profit of $670,000.
“Illegally trafficked cigarettes now have a higher profit margin than cocaine, heroin, marijuana or guns,” a Virginia State Police official was quoted as saying by the state’s Crime Commission.
In the current case, police were able to locate storage facilities in the Richmond area being used by the organized crime ring.
Fairfax County police have arrested more than a dozen people linked to the organization since 2015. In addition, Henrico authorities on Monday indicted 43 on charges including money laundering, cigarette smuggling, receiving stolen goods and obtaining money under false pretenses, among other charges. Police said 19 of the 43 are in custody.
Fairfax County police said that the investigation is ongoing and that they expect to bring additional charges against the suspects.