30th June 2021

A long-term solution to illicit tobacco?

Putting a stop to businesses that sell illegal tobacco products can be achieved by taking a novel and innovative approach to prosecutions.

By Andy Wright
Principal Trading Standards Officer, Lincolnshire Trading Standards
The letters clearly put the landlord on notice regarding the criminal offences they may commit by failing to act

In Lincolnshire we have been lucky enough to receive specific funding to combat illegal tobacco. That funding comes nowhere near covering the actual cost, but it does mean that we have been able to  conduct activities intended to reduce the sale of illegal tobacco for some years.

Lincolnshire has an extensive history of counterfeit clothing centred on tourist hotspots along the  east coast. Even so, illegal tobacco has now far outweighed counterfeit clothing as the main focus of criminal investigation for my officers.

Despite the reduction in supply of illegal cigarettes reported by HMRC, over the past 10 years on the ground we have seen a many-fold increase in the number of retail premises selling illegal cigarettes. Many premises use  such cigarettes as their primary source of income; most do not sell any form of legitimate cigarettes or tobacco; food items on shelves tend to be sparse with long (or expired) durability dates; stored stock is non-existent; most have long since lost their licence to sell alcohol; and there are usually large numbers of other premises selling similar, if not identical, products within a very short distance.

These are not viable food businesses; they are in fact outlets for illegal cigarettes that use food as a paper-thin façade to hide their primary purpose. Worryingly, despite the resource given, prosecution seemingly had little effect on the number of premises selling illegal cigarettes. In fact illegal cigarettes were still being sold from exactly the same establishments as they were 10 years before. In one instance eight separate defendants from the same premises had been prosecuted, but still  illegal product was freely available from the same outlet. In effect the only thing that changed following each prosecution was that on paper the person responsible for the tenancy changed. Despite the extensive premises history when a case got to court, few defendants were anything other than first-time offenders.

To a lesser extent a similar situation was apparent in no less than 48 similar premises across  Lincolnshire. There was a seemingly endless supply of people willing, for whatever reason, to provide their name fronting the business. Yes, given the resource we might have peeled away the veneer, but as we’re all aware our job isn’t solely about illegal cigarettes.

Clearly we were dealing with organised crime groups operating a number of individual premises and the tenant change was obviously part of the modus operandi. That doesn’t mean there weren’t successes – there certainly were – but none of that stemmed the tide.

A change of approach

Mr Viscomi owns a property in the centre of Lincoln. Between 2010 and 2018 he rented out that property for use as a business. Beyond that he had nothing to do with the business operating from his premises and was simply a landlord. As you might have guessed, this property was one with a history of selling illegal cigarettes under a number of different tenants.

In 2015 I had a meeting with Viscomi. During the meeting I outlined what had been happening at his premises and the potential pitfalls for him under the Proceeds of Crime Act (POCA). I formalised details of the meeting in writing, putting him on notice that premises under his ultimate control were being used for criminal conduct, and that the rental he was currently receiving on those premises could be presumed to have come in whole or in part from the proceeds of crime.

Following each subsequent seizure or test purchase I wrote again to Viscomi outlining what had happened at his premises. Throughout he maintained that all he was doing was renting out the property and what happened there was nothing to do with him.

In 2018 we commenced proceedings against Viscomi. He pleaded guilty to offences under section  328 of the Proceeds of Crime Act. He was 66 years of age, of previous good character and was given full credit for his early guilty plea. Despite this he received an eight-month sentence (suspended for 18 months), 240 hours community service, full costs against him, and a Proceeds of Crime  Confiscation Order was made out for £56,000 in respect of the rent he had received using the six-year assumption.

As Judge Watson told Viscomi in his summing up, “You knew of the criminal activity taking place at your premises because trading standards told you, yet you chose to do nothing”

The Viscomi case was essentially practical precedent that I later streamlined and implemented into Operation Aladdin.

Wish come true

At the beginning of 2020 I started Operation Aladdin. To date I have written to landlords of 32 premises informing them that their premises are being used for the retail of illicit cigarettes. The letters clearly put the landlord on notice regarding the criminal offences they themselves may commit by failing to act.

I now have standard letters that I use to speed up the process. I then write to a landlord each further time I have evidence I can prove beyond a reasonable doubt their premises is being used to supply illegal cigarettes. Broadly, the more times an individual landlord is written to, and the longer the offending takes place with their knowledge, the stronger the evidence becomes.

To date 19 separate premises have successfully evicted offending tenants. I have confirmation that eviction proceedings have been formally commenced in respect of a further two premises. Most importantly there has been no further offending whatsoever from any of the premises.

Where now?

The long-term success has been such that Lincolnshire TS does not do anything on illicit cigarettes without prioritising on the basis of the evidential requirements of Op Aladdin. I’m looking to include Op Aladdin principles in other areas of TS work. Although it has to be said these areas do not have the same persistent nature (and therefore the unique problem) as illicit cigarette retail and do not therefore provide the best fit.

Police are looking to use Op Aladdin principles in respect of cannabis growers in domestic rented properties. There is a higher than expected incidence of such properties being linked to the same landlords or letting agents, indicating this is not likely to be a chance occurrence.

I wait with interest to see what the recent HMRC consultation on sanctions to tackle tobacco duty evasion brings. The  proposals are interesting, and welcome. Although I suspect enforcement will not be without its practical difficulties, which may still leave room for Op Aladdin.

Unfortunately I’ve only been able to provide an overview in this article; through necessity much of the detail has been left out. I am happy to provide further information should anyone have an interest, and can be contacted here.

The benefits of bringing a prosecution via the POCA

▪ The starting point for sentencing is a custodial sentence

▪ The offence is a criminal lifestyle offence for the purposes of POCA

▪ A landlord will ALWAYS have POCA assets, i.e. the property they let out

▪ Whilst tenants may easily change following enforcement action, the landlord remains constant

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