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  • Illicit tobacco case studies

    Our case studies show how we're disrupting organised criminals involved in the serious offence of illicit tobacco.

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    What is illicit tobacco?

    Illicit tobacco is a form of organised crime and includes:

    • tobacco grown, manufactured or produced in Australia without a licence
    • imported tobacco for which no duty has been paid.

    With our cross-agency partners, we manage the risk associated with domestically grown and manufactured illicit tobacco products.

    Our case studies show how we achieve this; from uncovering illicit tobacco growing operations to prosecuting the organised criminals involved.

    Stay up to date with the latest illicit tobacco case studies by subscribing to our general email updates.

    If you suspect illicit tobacco is being grown or manufactured in your community, confidentially report it to us by making a tip-off or phoning 1800 060 062.

    Latest news

    'Hard to find' illicit tobacco grower sentenced

    A 54-year-old man, Imad Fatrouni, has been sentenced to a 16 months suspended intensive correction order and completion of 150 hours community service for being involved in a large-scale illicit tobacco manufacturing operation in Peats Ridge, New South Wales (NSW).

    In April 2020, officers from the ATO and NSW Police Force executed a search warrant at a rural property, following a community tip-off.

    At the time of the search warrants, 69,000 kilograms of illicit tobacco crops, equal to the weight of approximately 3 bulldozers, along with tobacco leaf located in 2 large greenhouses and 2 drying kilns were seized and destroyed. Equipment from a large industrial shed housing a tobacco production setup and other tobacco related machinery were also seized.

    An associate of Mr Fatrouni advised police that they ‘would not catch up with him as he is hard to find’. However, Mr Fatrouni did eventually face court and was charged with 2 offences

    • producing 500 kilograms or more of tobacco plant
    • possessing 500 kilograms or more of tobacco leaf.

    For those who believe they are outside the law and continue to grow and sell illicit tobacco, our message is clear – it’s only a matter of time before you are caught.

    Mr Fatrouni knew this himself, with analysis of his seized phone finding a link to a media article about an illicit tobacco seizure on an unrelated farm. An omen he clearly ignored.

    We work with federal and state government and law enforcement agencies, like the NSW Police Force, to stamp out illicit tobacco. Illicit tobacco operations can take time to investigate, uncover and prosecute those involved. Disrupting the illicit tobacco supply chain makes our officers’ efforts worthwhile; it stops black market tobacco making its way to the streets.

    Previous case studies

    It is illegal to grow tobacco in Australia

    In May 2021, ATO officers joined forces with Queensland Police to ‘butt out’ a 10 acre illicit tobacco growing operation on a property in Linthorpe, Queensland.

    Officers seized and destroyed 25 tonnes of illicit tobacco crops, with a potential excise value of almost $40 million.

    Assistant Commissioner Ian Read said, despite there being no licenced tobacco growers in Australia since 2006, organised crime syndicates continue trying to orchestrate these growing operations.

    “Operations like these are not run by genuine farmers or landowners, but by criminals living and operating in local communities,” Mr Read said.

    “Engaging in the illicit tobacco trade is not a victimless crime. It significantly deprives the community of taxes that are required to fund essential community services.”

    In this case, the growers had taken advantage of an unsuspecting landowner, leasing the land for a far more sinister purpose than what was agreed to.

    People approaching real estate agents, landowners or farmers to lease land within or outside of the state they live in is one of the signs to look for when land is being used to grow illicit tobacco. Other signs to look out for include:

    • intense labour production between November and May
    • suspicious responses to online and print ads where land is being advertised for sale or lease
    • earthworks along creeks and rivers on private and public land
    • an unexplained source of loose tobacco
    • unexplained and potentially unlawful use of water resources
    • an unexplained strong tobacco odour
    • large, leafy plants that, depending on the size, may resemble kale, cabbage or corn and may have a pink flower growing on top.

    This seizure showcases our commitment to stamping out illicit tobacco growing operations and removing illicit tobacco from our communities before it reaches retail supply.

    Read our media release for more information: $40 million in illegal tobacco seized from QLD Toowoomba region.

    Keeping the pressure on organised criminals

    Australia’s COVID-19 lockdown coincided with the peak harvesting season for illicit tobacco. Even during the midst of the pandemic, these highly organised crime syndicates did not stop operating. In fact, they took full advantage of the situation and made the most of it, using this quieter period to grow their illicit tobacco crops.

    Knowing how much was at stake and the risk these groups present to rural communities, we balanced the need to follow government restrictions and safety advice with ensuring these illicit tobacco growing operations were shut down.

    From January until June 2020, we conducted 15 search warrant operations in New South Wales and Victoria, seizing and destroying approximately 180 acres of illicit tobacco crops. This is equal to the size of at least 107 National Rugby League (NRL) fields or 36 Australian Football League (AFL) grounds.

    These operations demonstrate our dedication to stopping these organised criminals from defrauding the Commonwealth of legitimate revenue and funnelling their profits into organised crime well beyond the sale of illicit tobacco.

    A number of these organised crime syndicates have targeted unsuspecting landowners and have attempted to lease land to grow illicit tobacco.

    This was the case in the search warrant operation conducted in Bylands, Victoria, on 20 April 2020. The ATO, with assistance from Victoria Police, seized and destroyed 17 acres of illicit tobacco crops worth approximately $6.9 million in excise value.

    However, the landowner had leased the property for the growing of vegetables only. The organised criminals behind this illicit tobacco growing operation had clearly taken advantage of the lease and the landowner.

    Our officers are continuing to work hard during these uncertain times to protect vulnerable people in the community. While our staff members are limiting face to face contact and adhering to social distancing requirements, we are still maintaining our compliance measures.

    Read about our full year in review for 2019–20.

    Smoking out illegal tobacco growing operations

    In January 2020, we seized and destroyed 50 acres of illegal tobacco crops and seedlings from Mount Seaview, near Port Macquarie, New South Wales. This seizure showcases our commitment to continue to detect, disrupt and dismantle the organised crime syndicates that deal in illegal tobacco.

    A large-scale illegal tobacco growing operation, like the one in Mount Seaview could, on average, yield 25,000 kilograms of green tobacco leaf equating to approximately 3,000 kilograms of dried tobacco leaf.

    Typically, organised crime syndicates harvest their crops between February and May. If this crop was in North Queensland, North Western Australia or the Northern Territory, the harvest could be twice per year due to the warmer climate.

    This would effectively equate to approximately 50,000 kilograms of green tobacco leaf or 6,000 kilograms of dried tobacco leaf.

    A large-scale operation could be managed by 4 or more organised criminals who cut the dried tobacco leaf once it has been harvested.

    Once cut, the tobacco can be sold as loose-leaf tobacco, otherwise known as ‘chop-chop’. Chop-chop is an illegal black market product generally sold in small plastic bags. It can also be rolled and pressed into tubes, which are then sold as a box of cigarettes.

    Those involved in the illegal tobacco trade need to be able to distribute their product to the public. Small tobacco retailers may be targeted by organised crime syndicates to buy and sell illegally grown tobacco products.

    Selling illegal tobacco products:

    • is a serious tax crime
    • takes money away from the community that could fund hospitals, schools and roads, placing it directly in the hands of criminals.

    The ATO is part of the Illicit Tobacco Taskforce (ITTF), targeting criminal syndicates that operate in the black market economy. The ITTF follows the trail from crop to shop, looking to stamp out the illegal tobacco trade.

    In the Mount Seaview operation, the seizure was worth approximately $34.5 million in potential excise value. Those involved in the operation now face penalties of up to 1,500 penalty units. If prosecuted and found guilty, they face a criminal conviction with a maximum jail time of 10 years.

    Extinguishing the illicit tobacco trade

    It is illegal to grow tobacco in Australia without the appropriate excise licence.

    There have been no licenced tobacco growers in Australia since 2006. Yet the ATO continues to see organised crime syndicates trying to grow and distribute black market tobacco and divert profits into organised criminal activity.

    In April 2019, the ATO foiled a large illicit tobacco growing operation with a total combined potential excise value of more than $18.5 million.

    The ATO, with assistance from Victoria Police and New South Wales Police, seized and destroyed tobacco crops spanning a total of 33.95 acres and tobacco leaves weighing more than 16 tonnes at 2 separate properties.

    The illicit tobacco crop, grown at the regional New South Wales property, was mixed with corn to try to elude law enforcement.

    This seizure demonstrates the ATO’s capability to detect, disrupt and dismantle organised crime syndicates involved in the illicit tobacco trade – there is no place to hide.

    Last modified: 05 Jan 2023QC 71064