Crime gangs coaxing farmers into growing illegal tobacco: ATO

A number of major seizures in the last six months shows the brilliant green tobacco leaves are still a big allure to criminals wanting to make a ‘big buck out of baccy’.

Surprisingly it is often grown in large paddocks, a sea of big green leaves, in fairly open view of the public.

A raid at Shannon’s Flat north-west of  Cooma last month uncovered a large illegal tobacco operation, with a 92,000 plant crop estimated to be worth $11 million in excisable value. 

Police and officials from  the Australian Taxation Office raided the property on Callemondah Road. The sophisticated operation had tobacco in bins ready for drying. Police also discovered $15,000 in cash. 

In a statement after special questions from The Land, the Australian Taxation Office has warned landholders of being approached by individuals wanting to grow tobacco on their farms.

Large criminal syndicates are now involved in tobacco growing, encouraged to the illicit trade by the soaring price of cigarettes.

A spokesperson for the ATO said: “ Whilst we continue to see small farm plots still being used to grow illicit tobacco (primarily in Victoria and New South Wales) we have also seen the emergence of the use of green houses in non-traditional tobacco growing areas”.

“There are a number of syndicates involved in the domestic illicit tobacco industry and in some instances have known links to organised crime,” the spokesperson said. 

“ We are aware these groups approaching land owners who become inadvertently complicit in the illicit activity.”

There have been several raids in NSW and Victoria in the last six months.

While crops have been uncovered, also bales of illegal tobacco were found near Parkes.

In this financial year, in Australia, the ATO revealed:

• 45.3 acres of tobacco has been destroyed

• 237,000 tobacco seedlings destroyed total weight 23,703Kg

• 6,253kg of tobacco leaf seized and destroyed.

While illegal importations are still the major source for illicit tobacco products entering domestic retail markets, the syndicates are using farming land more and more for their illegal activities.

The ATO says generally, illicit crops are destroyed on site through the use of heavy machinery, such as tractors that cut and plough the plants, destroying them. 

“Where tobacco leaf is found, this is destroyed separately, generally through mixing with other material and burying at various locations.”

“These matters are investigated by the ATO’s Investigation Team, which is responsible for a broad range of tax-related criminal investigations, not just excise related matters.

“In combatting the illicit tobacco industry, the ATO works closely with other Commonwealth and State Government agencies.”

It is believed the ATO uses a range of techniques to identify illegal crops and they did not rule out satellite imagery was one of the ways.

“There are a number of ways that crops are identified, including information from the community and local law enforcement. A number of intelligence and other investigation techniques are used to identify illicit tobacco operations.”

Major excise warrants executed in the last six months include:

• On 15 November 2016, with the assistance of Victoria Police, the ATO executed warrants at a rural property in Eurobin Victoria, and seized and destroyed 123,000 tobacco plants (seedlings) from a hot house located at the property with an estimated Excise value of $10 million.

• On 9 December 2016, with the assistance of New South Wales Police, the ATO executed warrants at a property in Tahmoor New South Wales, and seized and destroyed 114,000 tobacco plants (seedlings) located at the property with an estimated Excise value of $8.7 million.

• On 17 January 2017, with the assistance of Victoria Police, the ATO executed warrants at a property near Bacchus Marsh Victoria, and seized and destroyed 4 acres of tobacco plants with a total weight of 3053kg estimated Excise value of $1.52 million.

• On 31 January 2017, the ATO executed warrants and seized and destroyed 980kgs of tobacco located at a property in New South Wales, with an estimated Excise value of $530,000.

• On 21 March 2017, with the assistance of Victoria Police, the ATO executed warrants at a property in Macorna, Victoria (Federal Division of Mallee), and destroyed 100kg of leaf tobacco and 15 acres of tobacco plants at the property with an estimated Excise value of $5.8 million.

• On 22 March 2017, with the assistance of New South Police, the ATO executed warrants at a property in Cooma, New South Wales, and destroyed 2120kg of leaf tobacco and 26.3 acres of tobacco plants at the property with an estimated Excise value of $11.77 million.

The ATO says it has been illegal to grow tobacco in Australia for more than a decade, with no licenced tobacco producers growing the crop since 2006.

“Currently, there are no licensed commercial tobacco producers or dealers in Australia.

“Our message is clear to those who evade or cheat the tax system: there is no place to hide.   Criminals who participate in the illegal tobacco trade need to be aware they will be discovered and there will be consequences.”

In 2015, a 47-year-old man was sentenced to an overall jail term of 18 months with a non-parole period of six months after he was found with 7000kg of illegal tobacco with a total excise value of over $1 million.

Any illegal activities can be reported to the  ATO on 1800 060 062.