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SMALL FEE HUGE FINE Payment for packing duty-unpaid cigarettes: $70 each 3-year jail term for men unable to pay $13 million fine By Andre Yeo December 28, 2007 THEY were each paid $70 to work as packers. But Prakash Mathivanan, Mohamed Hassan Peer Mohamed and Viknesh Mathivanan ended up facing multi-million dollar fines. The reason? They were packing duty-unpaid cigarettes. The excise duty evaded was $654,720 and since the fine for the offence is between 15 and 20 times the amount evaded, the trio were looking at a fine of $9.8 million to $13.1 million. In what the judge called one of the worst and largest cases of its kind, the court heard that the men had been recruited by a syndicate to pack cigarettes at an office unit at Enterprise One Building, Kaki Bukit Road 1. On 7 Aug at about 6.20pm, Singapore Customs officers raided the unit and arrested the three men. They found 2,000 cartons, each with 200 sticks of duty-unpaid cigarettes, inside a Singapore-registered van at Kaki Bukit. They found another 4,800 cartons each with 200 sticks of similar cigarettes in the office. The three men were questioned and admitted dealing in the cigarettes, which together with the van, were seized. On the same day around 6.15pm, Customs officers conducted another raid and arrested two other suspects at the multi-storey carpark of Katong Plaza. They found 1,000 cartons, each with 200 sticks of duty-unpaid cigarettes, in another van. Five minutes later, officers nabbed another two suspects at the carpark of Block 316, Ubi Avenue 1. Another 1,500 cartons of similar cigarettes were found from a third van. RECRUITED Investigations revealed that Prakash, Mohamed and Viknesh were recruited by a man named 'Ruben' to pack the cigarettes. 'Ruben' is still at large. While the trio were hard at work, two vans came separately and the cigarettes were loaded into them. The vans were then left in an unknown destination. The three men told officers they were to have been paid $70 each for the job. All in, 9,300 cartons of duty-unpaid cigarettes, weighing a total of 1,860kg, were seized. The three men pleaded guilty but their lawyer, Mr Low Hui Hui, said that as they were unable to pay the fines, the maximum imprisonment of three years' jail would be more than adequate. District Judge Liew Thiam Leng sentenced them to three years' jail. TACKLE PROBLEM In his judgment, he noted that cigarette-smuggling offences were highlighted in Parliament when the Customs Act was amended in 1966 to tackle the problem posed by those who dealt in cigarettes without paying excise duties. He said the number of cigarettes smuggled in this case was large. It would have involved planning and a group of people to pack, load and unload the cigarettes. He said figures provided by Customs showed that revenue loss from excise duty evaded through cigarette-smuggling had been increasing in the last five years. Judge Liew pointed out that cigarette-smuggling was harmful to the country both socially and economically. Cheaper cigarettes would make it easier for under-aged people to pick up the habit. And licensed retailers would be affected. He noted that the three men were part of a cigarette-smuggling syndicate and this called for a deterrent sentence. The three men had faced two charges each. The first charge was proceeded with and was for dealing in 1,860kg of cigarettes without paying the $654,720 excise duty. The second charge was for not paying the $58,600 GST for the cigarettes. This was taken into consideration during sentencing. The three men are appealing. http://newpaper.asia1.com.sg/news/story/0,...,151775,00.html proven! the higher the tax the higher the chance of pple smuggling. if this is so much of a deterrent, den is obviously not effective against smuggling