Sin-Tax Failure: The Market in Contraband Tobacco and Public Safety

[An Introduction to the Black Market] [The Size of the Market] [The Engine of Growth] [The Trail of Contraband] [The Native Dimension] [Other Native Involvement in Contraband] [The Warrior’s Society and the Black Market] [Other Dimensions of Violence] [Guns in Canadian Cities] [Organized Crime] [Countering the Black Market] [The High-Price, High-Tax Strategy] [Reducing the Contraband Market]

Chapter Nine

Organized Crime

The 1993 Organized Crime Committee Report of the Canadian Association of Chiefs of Police (CACP) is a marvel of brevity, yet the basic facts are there. Organized criminal gangs are involved with the tobacco smuggling industry and its related activities. According to the report these include Bike Gangs, the Mafia and Asian Gangs.

Bike Gangs: Some Six Nations residents allege that guns passing through the Reserve were ending up in the hands of a London, Ontario Bike Gang, the Annihilators. This violent group has links to the Iron Wings and the Outlaws and was rumoured to do strong-arm work for the Mafia. However, the majority of the Annihilators were recently jailed and the group is reported to have ceased to exist. The Hell’s Angels in Quebec are a powerful and well organized group. According to the Association of Chiefs of Police, they control most of the Exotic Dance Clubs, much of the cocaine trade in the province, and are connected to Columbian cocaine suppliers. They are reported to move cocaine into the US from Quebec, and Akwesasne is apparently a major conduit. The Satan’s Guard gang from Joncquiere is also involved in moving contraband.

One cause of gunfire along the St. Lawrence in Cornwall is "Piracy", the interception of cigarette boats by other criminals. Various Vietnamese and Chinese Triad members (see below) are involved in this, but at least one biker has been found floating in the river dead from gunshot wounds. They may play a role in the hijacking of shipments from independent smugglers on the roads out of Cornwall and Brockville. Bike Gangs have long been reported to be involved in strip clubs and bars in much of Canada. It seems reasonable to assume that the contraband cigarettes sold on many strip clubs passed through the hands of the bikers. The Highway Men bike gang in Newfoundland play a role in disturbing liquor and cigarettes smuggled from Sat. Pierre and Miquelon.

The Mafia: is more properly divided into the Sicilian Mafia (which has world-wide connections), the Cosa Nostra (the traditional American Mafia), and the Calabrian ‘Ndrangheta. Direct links to cigarette smuggling in Canada are not mentioned in the CACP report, but there are few activities in which the three Mafias are not involved.

Mafiosi on the American side of the trade have been tenuously linked to the Warriors in Tuscarora and Akwesasne. The sale of untaxed cigarettes has been a Mafia side-line for many years within the United States, other links possibly include ownership of some of the wholesalers who tranship Canadian cigarettes to Smokin’ Joe et al. When the Casinos were being established at Akwesasne, Emmet Francis Munley was present as a consultant. Munley had earlier been barred from involvement in gambling in Nevada and was connected to Meyer Lansky in the 1960s. Lansky had partnered with Lucky Luciano in the Prohibition Era and after 1934 remained a leading figure in the American Mafia.

Asian Gangs: include traditional Chinese Triads (some of which have operated in Canada for many decades), new Triads of immigrants such as the "Big Circle Boys" and Vietnamese gangs. These groups usually restricted predatory activities to the Asia-Canadian community. They engage in extortion and protection rackets, narcotics, business scams and a variety of other enterprises. Asian gangs, mostly Vietnamese and Chinese, are major smugglers of tobacco and alcohol in B.C. and Alberta. Some members own property along the border and major seizures have been made at border crossing points in British Columbia. Ships are also used to bring in supplies to B.C. and exported Canadian and American cigarettes are brought in from Nevada as well as border-states. More Traffic comes across unmanned border crossings on the Montana-Alberta border.

The most prominent Asian gang in Ontario’s contraband market are the Vietnamese gangs. They have been observed in Six Nations, Akwesasne and Cornwall and run tobacco to dealers in Hamilton and Toronto. Other gangs bring cigarettes through Walpole Island and the Oneida Reserve southwest of London. On November 4^th 1993, material for $1.5 million in cigarettes plus a rolling machine was seized in Scarborough. Three Chinese men were arrested by the RCMP. Two are refugees from Mainland China (and therefore are probably Big Circle Boys) who were already facing charges for the seizure of 5 tons of tobacco in 1992. They had a .45 calibre pistol without any serial numbers and a shotgun loaded with SSG slugs. On November 28^th, A-Bay Trinh was arrested when a police raid found 531 cartons of tobacco and 180 large 60-oz bottles of liquor stashed in his house.

The traditional Triads have not been as aggressive as the Big Circle Boys. This group has its roots in members of the Chinese Military and Red Guard who fled the country since the mid-1970s. From their very beginning, the Big Circle Boys cultivated a reputation for violence. They operate as a loose network of cells which co-operate with each other and may co-operate with non-members and Vietnamese at times. The Big Circle Boys first surfaced in Canada in 1987. Many of its members have arrived as refugee claimants. They are active in Montreal, Toronto, Edmonton and Vancouver. Contraband cigarettes have only been recently added to their repertoire of heroin trafficking, credit-card counterfeiting, alien smuggling and prostitution.

In the presence of Vietnamese gangs, even the Big Circle Boys tread softly. The Vietnamese are the survivors of a bloody war, harsh Communist rule and a trying refugee experience. Surviving these has either depended upon great strength of character, remarkable patience, or in the case of those who resorted to crime, amoral viciousness. Some former Vietnamese citizens are ethnic Chinese and provided a bridge for occasional Viet participation in the Triads. Loyalty has not been a major feature of Viet gangsters, but they have gelled into three loose confederations. These are the Viet Ching, Fukienese Youth and the Born to Kill gang. All of them are active in Canada.

Vietnamese "pirates" have been reported in Cornwall and supply many outlets in major Canadian cities-particularly in downtown Toronto and Calgary. Casual attempts to observe the extent of their network of outlets can be strongly discouraged. The traditional reticence towards authority within the Asian community has been extensively exploited by the new Triads and Vietnamese, although some Police Forces report that the more vicious ways of the new Triad is starting to change this custom.

All three levels of police in Ontario report intercepting a number of runners carrying cigarettes from Cornwall and Brockville west of the Toronto area and points beyond — the OPP detachment in Wawa arrested two Viets with a truck full of cigarettes en route to Buyers in western Canada in January 1994. According to Corporal Ian Pole of the RCMP detachment at Bowmanville, the runners are "unemployed, drug-users, street people, old people, young people, you name it" who leave Cornwall in convoys of four to five unremarkable vehicles crammed with cigarettes. Some of these stolen or have stolen license plates. On arriving in the Toronto area they deliver to storage units. These are generally owned by Vietnamese and Chinese, some of whom insist that they were forced to cooperate with the Triads and gangs. Despite these successes, many police believe they are intercepting less than 5% of the shipments. As usual, the runners are unimportant so far as the gangs are concerned.

Other Ethnic Criminal Groups are not well known or well organized. It is, however, a truism that most immigrant communities bring their own criminals with them. It appears that many storeowners who sell contraband are supplied by criminals within their own ethnic group. However, the chain may not reach back to the Canadian border. A Sikh taxi driver who provides cigarettes (and pistols) to other Sikhs received his supplies from "a European". Many of the non-Chinese/Viet owners of storage unit owners who have been found by police in the Toronto region have been Hindus, Sikhs, and other south-Asians. A Joint Task Force officer implied that, in his experience, Lebanese sold to Lebanese, Hindus to Hindus and so on. The largely French-Canadian underworld and various white Anglophones are also, of course, extensively involved throughout Quebec and suburban/rural Canada.

Events in Cornwall may lead one to the impression that the Warriors in Akwesasne are losing their control of the industry. There have been gun battles on the river with "pirates" and the buyers on the shore are often from the same gangs as the pirates. While the Warriors roister in local bars like the Jupiter Club, Eegles [sic], Shaafts or Mexacali Rose’s, other criminals have been testing their control of the Reserve or have been disrupting life in Cornwall. Members of the Montreal underworld were charged for two bombings in Cornwall in late 1993. Marcel Talon, a suspect in the $46.7 million robbery of an armoured truck in Montreal in July 1993, was arrested in connection with the bombing of a gym and a pool hall in Cornwall. Details are not forthcoming from police, but the actions may be in connection to feuding between groups of smugglers.

Added to this have been attempts to intercept cigarette boats on the St. Lawrence and the murder of a Warrior by a Chinese Triad member. Other developments in December 1993 suggest organized crime will intensify its efforts to gain influence in Akwesasne. Two members of the Montreal underworld invaded the home of an Akwesasne family, ostensibly as part of a robbery attempt. Home invasions are a new phenomenon in crime, the Big Circle Boys and Vietnamese began the practice in the mid-1980s to combine robbery with intimidation. Jamaican posses picked up the tactic in the late 1980s and it has spread to other groups. A series of mail bombs in Upstate New York in late December received widespread media coverage for killing five members of one family. A perpetrator has been arrested. However, the affair is more complex than that of an insane jilted lover. Willy Lazore survived his mail bomb by opening his package with a rake; his paranoid behavior saved his life. Lazore is described, by members of the Akwesasne exiled community, as a cigarette smuggler who may be involved in the trafficking of weapons.

In December 1993, Don Boudria, the Liberal Member of Parliament for Glengarry-Prescott-Russell, reported that organized crime has muscled its way into the cigarette trade. This was hardly news to police and his constituents. However, Boudria was reported by the Ottawa Citizen to have said "Now that the marketing system is in place and the tentacles of the operation have spread out across the country, it’s no longer a matter of a few extra police officers… I regret to say it, but the only solution is to lower the taxes."

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John Thompson is President of the Mackenzie Institute which studies political instability and terrorism. He can be reached at: mackenzieinstitute@bellnet.ca