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Since shortly after 9/11, the government has linked smuggling use with terror. Usually, that link spurs images of Afghan poppy fields under the wary eye of men in fatigues. Sometimes, though, it's garbage bags filled with money from selling illegal cigarettes in Brooklyn.

Yesterday, CNN reports, authorities arrested 16 Palestinian men in a scheme that may have generated $55 million in revenue from selling cigarettes without paying state tax. The group bought cigarettes in Virginia, moving them to a warehouse in Delaware. Several times a week, cartons of cigarettes would be brought to the city in vans and sold.

When authorities moved in, there was no shortage of evidence discovered.

Investigators said they seized three handguns from Basel Ramadan, as well as $1.4 million from his residence, some of which was stuffed into black plastic garbage bags.

More than 20,000 cartons of cigarettes were also taken from defendants' homes, cars and storage facilities in four states, authorities said. At least $200,000 in cash was seized from defendants in New York City alone, officials said.

The links to terror organizations are somewhat sketchy. Members of the smuggling group have been linked to Hamas, a Lebanese terrorist, and the "Blind Sheikh," Omar Abdel-Rahman. Such a link, however, wouldn't be unprecedented. In 2004, a ring similarly focused on selling untaxed cigarettes at a profit was tied directly to al Qaeda and Hezbollah. In 2002, a man in Charlotte was convicted of providing support to terrorists by similarly selling cigarettes.

Trying to get around New York's excise taxes on cigarettes — which is the highest in the country, as seen below — is not new behavior. New Yorkers pay more for each pack of cigarettes than anywhere else: $5.85 in taxes alone. This has led to a variety of efforts to reduce costs — guys in Manhattan sell single cigarettes; stores in Native American territory trying to avoid paying taxes. Where there is a demand, there will be a supply.

Excise tax by state

The state estimates that the scheme uncovered yesterday cost the state about $80 million in lost tax revenue — implying that the ring perhaps sold more than ten million packs of cigarettes during its run.

Photo: Two of the arrested suspects, Basel and Samir Ramadan. (AP)

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