New York Fumes Over Illegal Cigarettes; Sues FedEx for $235M

Source: Thinkstock

Source: Thinkstock

New York state has joined New York City in a lawsuit against FedEx Corp. (NYSE:FDX), which it says has been shipping untaxed cigarettes throughout the state. FedEx has responded by saying it was simply respecting consumer privacy by not checking packages without good reason, according to The Wall Street Journal.

Allegedly, FedEx was engaged in a partnership with the Shinnecock Smoke Shop to deliver untaxed cigarettes to consumer’s homes. New York City has called the company a “public nuisance,” according to the Chicago Tribune. The delivery company has apparently shipped about 80 million untaxed cigarettes.

“Not only has FedEx cheated the state out of millions of tax dollars — but many of these cigarettes have ended up in the hands of teenagers, who are particularly vulnerable to low-priced cigarettes,” said New York attorney general Eric Schneiderman.

Additionally, the shipments of untaxed cigarettes are allegedly a violation of an earlier agreement the company made with the state of New York in which it agreed stop shipping untaxed cigarettes throughout the state and the rest of the U.S.