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A discovery of undeclared tobacco by the New Zealand Customs Service has resulted in the restraint of more than NZ$2.5 million worth of assets by police under the Criminal Proceeds (Recovery) Act 2009.
In November 2023, Customs intercepted 110 kilograms of loose tobacco and over 230,000 cigarettes (or approximately 10,000 packets) concealed in Chinese tea packets destined for residential and business addresses in Napier and Gisborne.
No importation permits were held for the seized tobacco and cigarettes, and no excise equivalent duties were paid, amounting to around $645,000 in defrauded revenue.
Further investigations identified previous similar consignments had been successfully imported into New Zealand and were being sold by a restaurant in Gisborne to the public.
In March 2024, Customs carried out search warrants in Gisborne and located $10,000 cash in a bedroom, $106,371.20 in cash inside a vehicle parked outside the restaurant, and over 1kg of loose tobacco along with 11,000 cigarettes inside the restaurant.
The Customs investigation resulted in the seizure of 306,200 cigarettes in total, and charges were laid against four people for various offences under the Customs and Excise Act 2018.
With court proceedings still underway, the Police Asset Recovery Unit applied to the court and was granted restraint of the cash seized in the investigation along with further money from bank accounts, as well as four residential properties in Gisborne.
In total, over $2.5 million in assets has been restrained, and a forfeiture of the money and residential properties will be sought by the Police Asset Recovery Unit at the conclusion of the criminal charges.
Detective Senior Sergeant Mike Fischer from the Central Asset Recovery Unit said this investigation showed the reach of the Criminal Proceeds (Recovery) Act, and how closely officers were working with other government agencies to disrupt the flow of illicit funds.
"Funds sourced from any type of illegal activity can form the basis of criminal proceeds action.
"In this case, the blatant disregard of the law for personal gain has helped Customs and police uncover a large-scale fraud generating a high amount of income, from an activity that is unfortunately becoming more and more common," he said.
Chief Customs officer Nigel Barnes said illicit tobacco was not a victimless crime.
"It takes money out from our communities and puts it in the pockets of organised crime groups that then go on to use the money for other crimes.
"The motive for this offending is you can make a lot of money with low risk - but it's not actually low-risk, and this is a prime example of how criminals can expect to lose their ill-gotten gains."