UPS fined $247 million by US court for illegal cigarette shipments

UPS has been ordered to pay almost $247 million in damages for the illegal shipment of large volumes of untaxed cigarettes.

The order comes from a federal judge in New York, who levied such a significant penalty on the basis that it had to have a “sufficient corporate impact” on UPS. In fact, the state and city of New York had sought over $872 million, even though UPS argued that the cigarettes only generated about $1 million in revenue.

UPS was accused of shipping more than 680,000 cartons of contraband cigarettes to unlicensed wholesalers, retailers and residents since 2010, many of them manufactured in smoke shops on Indian reservations. The plaintiff claimed damages for loss of tax revenue and risk to public health.

The company was also accused of an unwillingness to co-operate and an “odd abrasiveness” with regards to its court filings.

UPS has said it will appeal the decision.

(Source: CNBC)