Illicit tobacco is a form of organised crime and includes:
- Tobacco grown, manufactured or produced in Australia without a licence.
- Imported tobacco for which no duty has been paid.
The ATO works with its cross-agency partners to manage the risk associated with domestically grown and manufactured illicit tobacco products.
A number of case studies are provided to illustrate how the ATO achieves this; from uncovering illicit tobacco growing operations to prosecuting the organised criminals involved.
Man found guilty of possessing illegal tobacco
Mr A was sentenced to 12 months imprisonment and fined $10,000 for possessing illicit tobacco products, with the sentence to be served as an Intensive Correction Order including 250 hours of community service. On April 27, 2023, NSW Police and Fire and Rescue NSW found illicit tobacco in Mr A’s home after extinguishing a fire. Further inspections revealed more illicit tobacco and cigarettes at his home and tobacconist shop. In total, 458 kilograms of loose-leaf tobacco and 3,730,380 illicit cigarettes were seized, with over $5.1 million in avoided excise. Mr A was charged with two counts of possessing significant quantities of illicit tobacco. Acting Assistant Commissioner Justin Clarke highlighted that the sale of illegal tobacco supports organised crime and deprives essential community services of funding.
$2.2 million in illicit tobacco taken for a ride
Mr B was sentenced at the Sydney Downing Centre Court for possessing illicit tobacco products. He received a 12-month prison sentence but was immediately released to serve a 12-month community corrections order. His truck was also forfeited. In June 2022, NSW police officers found 1,981,200 illicit tobacco cigarettes worth over $2.2 million in his truck in Yennora. Mr B was charged with possessing 500 kilograms or more of illicit tobacco. Assistant Commissioner Jade Hawkins emphasised that illicit tobacco harms community services and affirmed ongoing efforts with government and law enforcement to combat it.
Tobacco crop gets the chop
In March 2023, the ATO and Victoria Police raided a property in Bunbartha, Victoria, discovering over 10 acres of mature, illicit tobacco plants. The crops, weighing around 11,458 kilograms, had a potential excise value of over $19 million and were destroyed. Growing tobacco has been illegal in Australia for over a decade, with severe penalties including up to 10 years’ imprisonment, fines up to $412,500, or both for those convicted of growing, selling, or possessing illicit tobacco.
‘Hard to find’ illicit tobacco grower sentenced
Mr C received a 16-month suspended intensive correction order and must complete 150 hours of community service for his involvement in a large-scale illicit tobacco manufacturing operation in Peats Ridge, NSW. In April 2020, following a community tip-off, the ATO and NSW Police executed a search warrant at a rural property, discovering 69,000 kilograms of illicit tobacco crops and related equipment, all of which were seized and destroyed. Despite an associate claiming Mr C was hard to find, he was eventually charged with producing and possessing 500 kilograms or more of tobacco plant and leaf.
Key takeaways
The ATO’s collaborative efforts with cross-agency partners effectively address the risk posed by domestically grown and manufactured illicit tobacco products. Through various case studies, the ATO demonstrates its success in uncovering illicit tobacco operations and prosecuting those involved.
