Canada Charges R.J. Reynolds Group with Smuggling and Excise Tax Fraud

On February 28, 2003, the Royal Canadian Mounted Police (RCMP) filed criminal charges against R.J. Reynolds and its affiliates, charging them excise tax evasion in the amount of more than $1.2 billion ($809 million) arising from the smuggling of contraband tobacco products from the U.S. into Canada. The RCMP brought six charging of fraud and one count of conspiracy to commit fraud and possess the proceeds of crime against JTI-Macdonald Corp. of Toronto )formerly RJR-Macdonald Inc.), and R.J. Reynolds Tobacco Co. based in Delaware, R.J. Reynolds Tobacco International Inc., and Northern Brands International Inc. In a statement the RCMP said the charges result from a four-and-one half criminal investigation, which is continuing and result in additional changes. The RCMP has charged that, between 1991 and 1996, the defendants conspired to commit fraud by agreeing to deal in Canadian blend cigarettes and tobacco in a way that fraudulently deprived the Canadian, Ontario and Quebec governments of federal excise duties and taxes and provincial tobacco taxes.