Contraband Cigarette Auction

Mississippi will auction nearly a million cartons of cigarettes that state agents confiscated in April during a special raid. The state auditor says it's the largest seizure of contraband cigarettes in the nation's history - enough to fill 30 18 wheelers. Their location was guarded and kept secret until a week ago.

Tuesday morning at 10:00 a.m., the cartons of domestic and international cigarettes will be auctioned off at the warehouse where they were confiscated. It's on Highway 178, outside Tupelo.

The state values the cigarettes at about $20 million, which will be split between the state and federal government. The cartons are divided into six lots and will be sold in bulk, but the auction is not for the average Mississippian. The smallest lot contains more than 15,000 cartons. Cigarette retailers, distributors and manufacturers are expected attend the morning auction

"These individuals were looking to disseminate and distribute these cigarettes and avoid paying the excise tax that were owed on them," said State Auditor Stacey Pickering.

The U.S. Attorney's Office, FBI, ATF, State Tax Commission and several local agencies were involved in the investigation that nabbed the smokes. They were illegal because they didn't have the tax stamp required by state law.

The auditor says his office is in a unique position to fill the state coffers with cash at a time when the economy is struggling.
Pickering says his office has recovered more than $3 million in two years on fraud cases.

"Not only are we holding these individuals accountable, but we're recouping the money and returning it to the local jurisdiction or the state agency where it was intended to be in the first place," he said.

Investigators have suspects in this case, but have not made any arrests. However, Pickering says that could change in the coming weeks. Authorities say they know who owns the warehouse where the contraband sting happened, but won't say if they'll face charges.

This investigation led to additional raids in Mississippi, Kentucky and South Carolina.