EU Files New RICO Case against Cigarette Company Alleging Money Laundering

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Wednesday, January 1, 2003
Author: 
Bruce Zagaris
Volume: 
19
Issue: 
1
29
Abstract: 
On October 31, 2002, the European Community and ten European Union members filed a 149-page complaint against RJR Nabisco, R.J. Reynolds Tobacco Company and related companies (hereafter RJR defendants) based on allegations of selling black-market cigarettes to transnational organized crime and black-listed terrorist organizations and targeting lucrative and prohibitive markets, such as Iraq. In February 2002, U.S. District Judge Nicholas G. Garaufis dismissed a complaint brought by the same parties also in the U.S. District Court for the Eastern District of New York because the ?revenue rule? barred it. The rule is a doctrine of common law that prevents foreign governments from prosecuting tax cases in another country. The EU has appealed the dismissal in the case. The complaint alleges that since 1993 and continuing at least until February 2002, RJR defendants knowing distributed cigarettes through Turkey into Iraq, partly by creating false paperwork that misstated the destination of the cigarettes as Russia. The Complaint states the massive distributions of cigarettes to Iraq violated the Iraq sanctions Act of 1990.