Reuters reports that New York State has joined New York City in suing shipping giant FedEx Corporation (FDX) for allegedly violating state and federal law by delivering cartons of untaxed cigarettes to consumers across New York.
The state Attorney General’s office filed a $235 million lawsuit against FedEx on Sunday, alleging that the company was knowingly shipping mountains of contraband cigarettes directly to consumers. According to an amended complaint filed in Manhattan federal court on Sunday, FedEx shipped nearly “400,000 cartons of unstamped cigarettes to homes in the state, depriving it of $15, $27.50 or $43.50 on each carton in tax revenue.” The filing says the shipments of 140 tons of contraband cost the state a ‘direct tax loss’ of more than $10 million.
“FedEx’s blatant disregard for…. federal and state law, enabled tens of millions of cheap, untaxed cigarettes to be shipped to New Yorkers,” said in a statement state Attorney General Eric Schneiderman.
The suit seeks $70 million in damages, plus $164 million in penalties.
FedEx shares closed 0.08% down Friday to $132.01.