An investigation by the Maryland Comptroller’s Office that spanned several weeks turned up 130,000 sticks of untaxed tobacco products, along with more than 2,600 illegal cigarettes.
Comptroller Peter Franchot says Kyun Hong from Severna Park is at the center of it all. Agents watched him transport a large quantity of tobacco products, but where he got it from is still unknown.
The Avenue Bar on Greenmount Ave. received a $500 citation in connection with the case, but the manager says he buys cartons of cigarettes from wholesalers and he doesn't know Hong.
"We expect all the cigarettes are good to sell for retail, but unfortunately those few cigarettes we had wasn't stamped," said Sung Kim, manager, The Avenue Bar.
Kim showed us the boxes he has now with a stamp saying "Maryland Tax Paid."
He plans to take his case to court. Caron Brace with the comptroller's office says these underground operations are more common than you may think. One reason may be the taxes on cigarettes - $2 per pack in Maryland versus 30 cents in Virginia.
"Especially in this economy, people are trying to get around whatever they can. But when you have another business down the street that is paying their taxes, it's just not fair," said Brace.
Sung Kim thinks he's being unfairly targeted. He calls himself a victim of the wholesaler.
"I don't know how in the world those things can happen, but it happened."
The Maryland Comptroller's Office says it lost more than $25,000 from this one operation.
The investigation is far from over. More businesses may be named, and the comptroller's office hopes to track down where Hong was getting the tobacco.
He is charged with transporting and possession of contraband cigarettes.
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