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    Texas Attorney General Claims B&W Cheats the State

    Company says it's not responsible for paying $17.3 billion settlement.

    HOUSTON -- Texas' Attorney General Greg Abbot filed a motion in federal court Thursday accusing cigarette maker Brown & Williamson of avoiding $16 million in tobacco settlement payments by funneling product through another company, reported San Antonio-based KSAT.com.

    Appearing in Houston, Abbott said he filed the motion in the same Texarkana federal court where the state hammered out a $17.3 billion settlement with tobacco companies in 1998.

    "The company literally used smoke and mirrors to hide the shipment of 7.5 billion cigarettes," Abbott said. "Brown & Williamson has defrauded the state of Texas by hiding the shipment of cigarettes and failing to give Texas taxpayers their fair share."

    Abbott is mistaken, according to Brown & Williamson spokesman Mark Smith.

    The Louisville, Ky., company did make cigarettes for Star Tobacco out of Richmond, Va., but Smith said the products that hit the market were Star cigarettes and not Brown & Williamson's, so they don't apply to the settlement's requirement to pay Texas a percentage of domestic sales.

    "It's not our product, it's a Star Tobacco product," Smith said. "The attorney general needs to talk to Star Tobacco."

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