Tag: illicit products

U.S. Customs Seizes $81 Million in Vapes This Year

Credit: Eduardo Barraza
During the last 12 months, U.S. Customs and Border Protections (CBP) officers in Chicago made 121 seizures containing over 3.2 million prohibited Electronic Nicotine Delivery Systems (ENDS) products with a Manufacturer’s Suggested Retail Price of more than $81.5 million.
Almost all the shipments originated from China and were destined for locations across the U.S. Most shipments violated the FDA’s Federal Food, Drug, and Cosmetic Act (FD&C Act), while some were seized for Intellectual Property Rights (IPR) violations, according to CPB. Some of the IPR violations concerned used unauthorized trademarks associated with pop icons. By copying these well-known marks, the seller targeted teens and younger adults, hoping to persuade them to purchase their counterfeited items.
“It is common for bad actors to use popular people and brands to promote their products. In a couple of these instances, they used the name of an influencer with a large following specifically targeting the younger audience,” said LaFonda D. Sutton-Burke, director, Field Operations, Chicago Field Office. “CBP’s trade enforcement mission places a significant emphasis on intercepting illicit products that could harm American consumers, and we will continue to work with our consumer product safety partners to identify and seize unsafe and unlawful goods.”
In addition to IPR violations, CBP seized these products because they lacked the required FDA marketing authorization and were found to be adulterated and misbranded, violating the FD&C Act. Vapes, e-cigarettes, and other electronic nicotine delivery systems that are unapproved by the FDA may contain higher levels of nicotine and other unknown, toxic chemicals, making them extremely hazardous to health.
“Criminals are using every means imaginable to expand the reach of their illicit enterprises,” said Mike Pfeiffer, Chicago area port director. “The sales from illegal goods are used to fuel further criminal activities such as the trafficking of drugs, defrauding innocent people, and purchases of illegal weapons, just to name a few.”
CBP provides basic import information about admissibility requirements and the clearance process for e-commerce goods and encourages buyers to confirm that their purchases and the importation of those purchases comply with state and federal import regulations.
December 17, 2024
Texas Police ‘Traumatize’ Store Staff in Hemp Raids

Credit: Ongala
Police in Allen, Texas, secured up evidence and marched out business owners in handcuffs for selling what attorneys for the vape shops say are legal products. In a coordinated raid, police invaded nine locations simultaneously.
Allen police chief Steve Dye told media that the stores involved, more than a third of the vape shops within Allen city limits, were all caught marketing and selling products with illegal levels of THC. The THC compound can be derived from marijuana and hemp (both members of the cannabis family).
“We did multiple rounds of undercover operations, including sending minors in, and many of them were able to buy the THC underage. And then we started testing those products and we found that the vast majority of those products were well over the .3 percent,” he said.
Early Wednesday morning, an attorney representing some of the vape shops in a federal lawsuit against the DEA called the raids “legally questionable.”
“These local, family-owned businesses are operating legally. The Allen, Texas Police Department and the DEA overstepped their authority by destroying products, taking point-of-sale systems and records, and confiscating personal computers belonging to employees,” said David Sergi of San Marcos-based Sergi & Associates.
Pictures provided by the U.S. Drug Enforcement Administration, which assisted with the raid, show a bag of chips labeled “Doweedos”, cookies labeled “Trips Ahoy” and candy labeled “Medicated Skittles.”
“We’ve seen percentages of THC in the high teens, upwards of 60, 65 percent. That is almost toxic levels of THC when you think about it. And is that what somebody is expecting to get?” asked DEA Special Agent In Charge Eduardo Chavez.
The raids left owners and employees “traumatized,” according to Sergi, who also represents the Allen Hemp Coalition as well as eight of the nine shop owners. “We think it’s absolutely horrendous,” he told a media oulet.
Sergi said that when police sent a letter to businesses in May raising concerns, the stores voluntarily removed the products mentioned from their shelves. This time, he said, police chose a different approach.
“Rather than getting guidance and partnership from the Allen Police Department, we have gotten arrested, we have had clients whose stores have been destroyed, we have employees whose computers have been taken,” he said.
Sergi said that while there’s no law against selling hemp products to minors, many shops voluntarily choose not to.
When asked about the attorney’s comments, a spokesperson for Allen police said the department tried working with store owners, offering to provide advice about which products might pose a problem. Not all, he said, took them up on it.
August 31, 2024
Minnesota Attorney General Warns Illegal Vape Sellers

Credit: Chris Titze Imaging
The Minnesota Attorney General’s Office is sending thousands of letters to smoke shop retailers warning them to cease selling deceptive vaping products.
Attorney General Keith Ellison states that some of the products are indistinguishable from everyday highlighters and other school supplies.
Ellison states that once the rules are known, retailers will be fined up to $25,000 per device sold for violating them.
State law prohibits tobacco products from being advertised to children; however, new products like “highlight” disguise themselves as everyday school supplies. And that makes it easier for students to smuggle devices into school, according to media reports.
Ellison stated that the objective is to encourage voluntary compliance, but he also emphasized that his office will take legal action against businesses that choose to violate the law.
August 30, 2024
New Jersey Fines 19 Retailers for Illegal Vape Sales

Credit: VetKit
Sellers were allegedly violating the state’s consumer protection laws and were fined $4,500 each.
New Jersey Attorney General Matthew Platkin and the state’s division of consumer affairs told media that 19 New Jersey retailers were issued notices of violation and assessed civil penalties of $4,500 each. The retailers were allegedly violating the state’s consumer protection laws by offering and selling flavored vapor products that are banned for sale in New Jersey, according to the attorney general’s office.
The enforcement actions are the result of an investigation launched in June 2024 into the unlawful offer and sale of flavored vaping products, which research has shown to be appealing to teens and children, the attorney general’s office said.
Through undercover buys and in-store inspections, investigators identified smoke shops, convenience stores, and gift and novelty retailers in five counties offering and selling the banned products. The attorney general said that “many” of these retailers were close to schools and parks or on or near shore town boardwalks.
“As students across the state head back to school, we’re sending a message of deterrence to retailers. If you are caught selling these dangerous, banned products, you will be held accountable,” Platkin said.
In 2020, New Jersey Gov. Phil Murphy signed legislation prohibiting the sale and distribution of all vapor products with a flavor, taste, or aroma other than tobacco.
“The ban on flavor vaping devices is in place to protect New Jersey consumers—especially our youth—from the harmful effects of electronic cigarettes, nicotine, and tobacco,” said Cari Fais, acting director of the division of consumer affairs. “By identifying and taking enforcement action against merchants who illegally sell these products, we are protecting public health and fulfilling our responsibility to safeguard consumers from unlawful business practices.”
August 30, 2024
US Customs Seizes 53,700 Illegal Flavored Vape Pens
U.S. Customs and Border Protection (CBP) officers in Chicago recently seized 53,700 electronic nicotine delivery systems (ENDS) for violating the U.S. Food and Drug Administration’s Federal Food, Drug, and Cosmetic Act (FD&C Act).
The shipment, originating from China, was destined for a wholesaler in Mississippi, according to a CBP release.
The vaping pens were inspected by CBP and the FDA, and it was determined that the shipment violated the FD&C Act as it consisted of adulterated consumer goods being imported by an unauthorized agent. On June 10, the FDA announced the establishment of a federal multi-agency task force to combat the illegal distribution and sale of e-cigarettes.
“Our officers are dedicated to identifying and intercepting these types of shipments that could potentially harm the health and wellbeing of people within our communities,” said LaFonda Sutton-Burke, Direction Field Operations, Chicago Field Officer. “Customs and Border Protection’s trade enforcement mission places a significant emphasis on intercepting illicit products that could harm American consumers, and we will continue to work with our consumer product safety partners to identify and seize unsafe and illicit goods.”
The 179 boxes were mislabeled as electronic atomizers, a common practice used to smuggle unapproved goods into the U.S. CBP presumes the products were being sent to a wholesaler for wider distribution throughout the country. CBP continues to work diligently to stop non-legitimate products from entering the U.S. The ENDs had a combined Manufacturer’s Suggest Retail Price of over $1.08 million.
June 26, 2024
California Cops Seize $189,000 in Illegal Vaping Products

Credit: Sundry Photography
In the California city of San Mateo law enforcement officials seized a large number of flavored vape cartridges from a smoke shop following an unscheduled compliance check.
Officers visited the store on Tuesday afternoon, August 15th to carry out the inspection after a person was observed purchasing a flavored vaping product, according to Hoodline.
Officers with the San Mateo Police Department Youth Services Unit witnessed a store employee sell flavored tobacco to a customer, police said.
California voters passed SB793 last November, banning the sale of flavored tobacco products, including e-cigarettes, e-liquids, pods, and any other vape device.
An investigation of the store revealed 6,298 flavored vape cartridges, valued at around $189,000, according to police. The cartridges were seized, but the investigation remains ongoing.
The San Mateo Police Department is coordinating with the San Mateo County District Attorney’s Office in filing charges.
August 18, 2023
Affordable Vape Products May Temper Black Market

Credit: Yehuda
A study conducted by researchers at Johns Hopkins University suggests that if regulators limit the nicotine content of cigarettes, people may turn to illegal sources to buy full-nicotine cigarettes, reports Filter. However, the availability of affordable vape products could deter this shift to the illicit market.
The study found that nicotine vapes, which are believed to be less harmful than cigarettes, played a crucial role in people’s choices. When vapes were priced lower than illegal cigarettes, they were purchased to a greater extent, according to the study. Restricting nicotine content alone could lead to an increase in black market cigarette purchases, but making e-cigarettes more affordable could reduce combusted cigarette consumption, the authors suggested. The study emphasizes the importance of regulating vaping products alongside reducing nicotine in smoked tobacco.
The findings suggest that a mandate requiring all cigarettes to have low nicotine content may be unnecessary if the right policy environment is established, including favorable taxation and diverse smoke-free alternatives.
June 9, 2023
RLX Reeling From Illicit Flavored Vape Products

Creit: RELX
RLX Technology reported net revenues of RMB188.9 million ($27.5 million) for the first quarter of 2023, down from RMB1.71 billion in the same period of 2022. Gross margin was 24.2 percent during the quarter, compared with 38.3 percent in the comparable 2022 period. GAAP net loss was RMB56.3 million, compared with GAAP net income of RMB687.1 million in the same period of 2022. Non-GAAP net income totaled RMB183.6 million, down from RMB361.8 million in the same period of 2022.
RLX Technology attributed its struggles to fierce competition from illicit products. “We experienced an incredibly challenging first quarter as illegal-flavored products caused users’ slow shift to products that meet the national standards and drove our total revenues down to RMB188.9 million. Our gross margin declined as we incurred the full effect of the new excise tax in the first quarter,” said RLX Technology Chief Financial Officer Chao Lu in a statement.
“We are pleased that market conditions have improved, following the regulators’ strict actions to combat illegal products since March 2023. As a result, our sales are showing signs of recovery. Looking ahead, we will continue improving our operational efficiency and believe our profitability will gradually recover. Our resilient business model and solid cash position will support us as we navigate the market dynamics, enabling us to deliver sustainable value to our stakeholders as the industry regains momentum.”
According to RLX Technology co-founder, CEO and Board Chair Ying (Kate) Wang, the company remained focused on optimizing its product offerings under the new regulatory framework during the first quarter.
“While we strive to develop diversified, new, approved products that cater to users’ various demands, the prevalence of illegal products has posed near-term challenges to our sales and disrupted the recovery pace of the industry as a whole.
“The increasing efforts put forth by the regulators to crack down on illegal products have been encouraging, and we are hopeful that these will be effective in supporting the creation of fair and orderly market conditions, prompting a return to sustainable growth for law-abiding companies such as RLX Technology.
“If illegal products can be pushed out of the market, we believe adult users will gradually adapt to products that meet national standards. As a trusted e-vapor brand for adult smokers, we remain committed to providing compliant, superior products that meet our users’ needs as we continue exploring growth opportunities in the evolving industry.”

May 17, 2023
Police in Thailand Seize $2.3 Million in Illegal Vapes

Credit: a3701027
Police in Thailand seized vaping devices and accessories valued at over 80 million baht ($2.294 million) during police raids in Bangkok and Nakhon Pathom on Saturday.
Cyber Crime Investigation Bureau deputy commissioner Maj-General Pairoj Sukruaythanachote told a press conference that three locations, including a warehouse, were searched in Nakhon Pathom’s Mueang district.
He said two people were arrested and nearly 50 million baht worth of vaping devices and accessories was confiscated during the raids, according to Nation Thailand.
In Bangkok, police searched a condominium in Ratchathewi district where another nearly 50 million baht worth of vaping devices and accessories was confiscated, Pairoj said, adding that a suspect was arrested during the raid.
Those arrested were charged with importing prohibited items, violating the Consumer Protection Act and the Export-Import Act. Further investigations are underway to find other people involved, police said.
Activists are confident that Thailand will legalize vaping after the likely general elections in May.
Vaping is currently prohibited in the kingdom, but discussions are ongoing to end the ban, according to ENDS Cigarette Smoke Thailand (ECST).
March 13, 2023
Research: Vaping Flavor Bans Boost Black Markets

Credit: Luxor Photo
Flavor bans are creating black markets that cost U.S. states a massive amount of money in lost taxes, according to the latest research.
Just go to any online consumer-to-consumer website and flavored vaping and other tobacco products are for sale in states with flavored tobacco bans. A quick search for menthol on sites such as Craigslist and OfferUp in California or Massachusetts, where flavored products are banned, will yield results for every flavor of vaping product from apple to vanilla for sale. You can also find nearly every brand of menthol cigarettes for purchase on the online black market.
New York, New Jersey and Rhode Island also have barred the sale of flavored vaping products. Massachusetts and California banned all flavored tobacco items, including flavored cigars, cigarettes and vaping goods. Since California’s flavored tobacco ban went into effect on Dec. 21, one week after the U.S. Supreme Court blocked R.J. Reynolds Tobacco Co.’s contention that the new state law conflicted with federal law, the state’s black market for flavored tobacco products has grown exponentially.
Stat News reported that in January it visited 24 California vape shops throughout Oxnard, Ventura, Pasadena, El Monte, Carson and West Hollywood—all of which have had bans on flavored vapes on the books for at least a year and most for two or more years. Seventeen of the shops, or 70 percent, were selling the products anyway. In Oxnard, where the news group visited five shops, none of the stores sold flavored vapes.
States in the proximity of states that have enacted flavor bans have some of the highest tobacco smuggling rates in the country. A report by the nonpartisan Tax Foundation found that New York has the highest inbound smuggling activity, with an estimated 53.5 percent of cigarettes consumed in the state deriving from smuggled sources in 2020. New York is followed by California (44.8 percent).
New Hampshire has the highest level of net outbound smuggling at 52.4 percent of consumption. This is likely due to the state’s relatively low tax rates and proximity to states with strict tobacco regulations and high taxes. The report said the move by other Northeast states to raise cigarette taxes and ban certain tobacco products have made cigarette smuggling a lucrative criminal initiative.
“People respond to incentives,” said Adam Hoffer, the Tax Foundation’s director of excise tax policy. “As tax rates increase or products are banned from sale, consumers and producers search for ways around these penalties and restrictions.”
Last year, JAMA Internal Medicine published a study about the impact of banning flavored tobacco products in Massachusetts. The study found that the sale of flavored tobacco decreased following the ban. However, when comparing sales in Massachusetts with sales across 27 other states, the authors found that sales had decreased more in Massachusetts than in the control states.
“Such a result would indicate that the flavor ban has been a success. Unfortunately, the study left out a very important piece of information: cross-border trade,” Ulrik Boesen, also with the Tax Foundation, stated at the time. “The end result of the ban, in fact, is that Massachusetts is stuck with the societal costs associated with consumption while the revenue from taxing flavored tobacco products is being raised in neighboring states.”
A 2022 report from the Massachusetts Multi-Agency Illegal Tobacco Taskforce found that in 2021, state police and the Department of Revenue seized more than 5,000 packs of cigarettes and more than 100,000 vapor products. It also details multiple investigations and prosecutions, including ones leading to sentences of six months to a year. Some of these were for smuggling that predate the flavor ban, but others clearly involve it.
For example, the report notes an ongoing investigation into a February 2022 seizure of more than 5,000 flavored e-cigarettes as well as a motor vehicle stop that netted “a large quantity of untaxed flavored ENDS [electronic nicotine-delivery system] products, cigars, smokeless tobacco and cigarettes” representing $21,000 in unpaid taxes. “As it happens, looking at the New England region as a whole confirms that the flavor ban did not work as intended. Sales moved around rather than disappeared, and the ban evidently did not impact consumption,” stated Boesen. “Total sales for the region decreased by slightly more than 1 percent comparing the 12 months preceding the ban to the 12 months following the ban—largely comparable to the national sales trends.”
February 22, 2023