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MIAMI --Law enforcement and cigar industry officials say counterfeiters are marketing millions of dollars in fake upscale cigars, some even presented as authentic Cubans, which are illegal to sell in the United States, reported the Associated Press.
With its proximity to Cuba and the Caribbean and large population of Cuban expatriates, South Florida has become a national hotbed for cigar counterfeiters.
Federal and state law enforcement officials, at the request of Altadis, have made more than a dozen arrests over the past six months with investigators now focusing on higher-level organizers, reported AP.
A recent crackdown has uncovered several major counterfeit operations, including one in Miami that resulted in the seizure of more than $20 million in fake stogies, labels and packaging, according to the report.
"The person that's hurt the most is the consumer," said Theo Folz, president and chief executive officer of Fort Lauderdale-based Altadis USA, maker and distributor of cigars, told AP. "We have developed products and built up an image and built up an expectation among the consumers. Guys put their money down. They want the real thing."
"We're getting into the bigger targets and the ones who try to conceal it better," a U.S. Immigration and Customs Enforcement undercover agent who agreed to be identified only as Ramon to protect his identity, told AP. "I think there's a lot more. We have only gotten the lower-level guys."
Still, what was seized late last year from several warehouses in Miami astounded both police and industry officials. There were enough counterfeit cigar bands, boxes, cellophane and other materials for between 30 and 50 million cigars -- sufficient to make a significant dent in the legitimate premium market, according to the report.
"We've all gotten an appreciation that the counterfeiting problem is much greater than we thought it was," Norman Sharp, president of the Washington-based Cigar Association of America, told AP.
According to federal government statistics, Americans smoked about 5.1 billion large cigars in 2005 and spent about $3.2 billion on all cigars.
Of those, about 321 million were classified as premium -- that is, they were handmade, usually comprised of long tobacco filler instead of chopped tobacco, and retailed for at least $1 apiece. Such cigars can run upward of $30 each, according to the report.