The Shuster Project
Tobacco Industry Fraud & False Claims Issues
Click HERE To Read Our Letter Sent to Senator Kerry's Presidential Campaign
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The Shuster Project Tobacco Industry Fraud & False Claims Issues
Click HERE To Read Our Letter Sent to Senator Kerry's Presidential Campaign
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EVERY PRESS RELEASE ISSUED BY "THE SHUSTER PROJECT" HAS GONE OUT TO 3,750+ "BRICK & MORTAR" AND "ONLINE" MEDIA OUTLETS ACROSS THE UNITED STATES AND FOREIGN AND OVERSEAS MEDIA OUTLETS. THESE MEDIA OUTLETS CONSIST OF NEWSPAPERS, RADIO NEWS STATIONS AND TELEVISION STATIONS AND THEIR "ONLINE" COUNTERPARTS. CHANCES ARE THAT NO MATTER WHERE YOU LIVE, AT LEAST ONE OF THE NEWSPAPERS YOU READ, ONE OF THE RADIO STATIONS YOU LISTEN TO AND/OR ONE OF THE TELEVISION NEWS PROGRAMS YOU WATCH HAVE RECEIVED OUR PRESS RELEASES. WE ARE MAKING ACCESS TO OUR PRESS RELEASES AVAILABLE TO YOU RIGHT ON OUR MAIN ENTRY WEB PAGE AND ALSO IN OUR "NEWS" SECTION. IN THIS WAY, YOU CAN READ FOR YOURSELF THE
EXACT SAME INFORMATION THAT WE GIVE TO THE MEDIA OUTLETS THAT PROVIDE YOU WITH THE
"NEWS" THAT YOU OBTAIN; YET IT'S INFORMATION THAT THEY HAVEN'T BEEN TELLING YOU
ABOUT. IF YOU FEEL, AFTER READING THESE PRESS RELEASES, THAT THIS INFORMATION ISN'T JUST SOMETHING YOU FEEL THEY SHOULD HAVE BEEN PASSING ALONG TO YOU BUT SHOULD ALSO BE PROVIDING INDEPTH COVERAGE ON, WE ENCOURAGE YOU TO PARTICIPATE IN OUR "MEDIA ALERT" PROGRAM.
PRESS RELEASE #7
Press Release #7 To: Select Media Outlets (Newspapers, Radio News Stations, Television News Stations) Re: The standardized formula utilized by the tobacco companies which defraud all states with "State Minimum Price" statutes (including CT) of hundreds of millions of dollars of state sales tax revenues, including illustrated calculations to demonstrate these losses. From: The Shuster Project - Tobacco Industry Fraud & False Claims Issues Robert X. Shuster - Executive Director 177 Andrew Avenue - Naugatuck, CT 06770-4359 E-mail: RShus177@aol.com Telephone: (203) 723-1690 Fax: (801) 705-3078 Date: 5/5/2002 Unknown to the American public
for well over 4 decades now, yet known since late 1999 by CT State Reps. DelGobbo and San
Angelo, and in a variety of ways, tobacco industry fraud & false claims has defrauded
every state in the country that has "State Minimum Price" statutes on cigarettes
and tobacco products, including CT, collectively of well in excess of $3.5 billion
dollars. This
fraudulent activity on the part of the tobacco companies has defrauded state tax revenues,
adversely affecting the elderly, children, minorities, veterans, including placing
storeowners that sell cigarettes in fantastic financial liabilities to pay under-collected
state sales taxes out of their own assets, and it's even cost the NON-smoking public for
the moneys that would otherwise go into the General Funds of the treasuries of all of the
states affected with "State Minimum Price" statutes. And
this fraudulent activity continues to this day. The
"method" and the calculations are quite simple, yet very "invisible,"
which is why it has never been detected before, but which is not to say that it couldn't
have been, either. The
"method" by which this fraud is perpetrated is simply this: Tobacco
company representatives are trained from the very beginning, in the course of learning
their sales presentations, to ascertain the retail "selling" price(s) of
packages of cigarettes in each retail or supermarket outlet, with a majority of the
highest volume outlets advertising that they sell their cigarettes at the lowest
"State Minimum Price" allowed by law. For
the sake of "easy math," let's assume that the average "State Minimum
Price" in a tobacco company representative's “example state” is,
conservatively speaking, $3.00 per pack. Let's
also assume that the tobacco company representative's "sales campaign" for that
month entails affixing a 30 cent per pack "discount coupon" on large numbers of
individual packages of cigarettes, say 60 packs comprising two counter displays, the type
of which you see on counters in small markets and variety stores all across the country. Nothing
wrong with that sofar, right? Now,
the tobacco company representative takes several pieces of "pricing" advertising
material from his sales bag that has a "blank" bubble or circle prominently
located on it's face along with usually a picture of a pack of the brand being
"discounted" for visual and "impulse buying" impact and begins, as
he/she's trained to do, to place a price in the blank circle for what will be the amount
rung up at the register by that store's cashier. That
tobacco company sales representative marks the circle with a price of $2.70 + tax per
pack. Now
if you blinked, you missed the fraud involved in that tiny gesture of marking the
advertising piece(s) with that price. How,
you ask? To
begin with, the legitimate way it should have been marked was with a selling price of
$3.00 + tax -30 cents. The
premise of most, if not all, "State Minimum Price" statutes is that that pack of
cigarettes, under NO circumstances, was to have had it’s state's sales tax applied to
any amount LESS THAN THAT STATE’S MINIMUM PRICE, in this example state it’s
$3.00; but it is practically NEVER priced by tobacco company representatives in accordance
with the law. What's
the difference, you ask? Let's
assume for this example that the state sales tax in question is 6%...$2.70 X 6% state
sales tax = 16 cents state sales tax would go to that state in sales tax revenues for the
sale of that pack of cigarettes when the "discount" of 30 cents off that pack
was improperly and illegally calculated into the "sale" price. However,
$3.00 X 6% state sales tax = 18 cents state sales tax would go to that state in sales tax
revenues for the legitimate sale of that pack of cigarettes regardless of the
"discount" of 30 cents properly affixed to that pack of cigarettes. Many
states have varying nuances to their "State Minimum Price" statutes which make
those statutes differ somewhat from each other state. But
in practically each and every state with "State Minimum Price" statutes, the
intent is very clear that NO state sales tax will be affixed, in the process of
ringing that pack up for sale, for ANY LESS THAN their "STATE MINIMUM PRICE." PERIOD! NO
EXCEPTIONS! Anyone
in retail will tell you that pennies add up. The calculations now become easier. 2
cents times 1,000,000 (one million) sales is $20,000.00. In
the "heyday" period of the late 1960's and through the 70's, 80's and into the
1990's there were approximately 8,000 - 12,000 full and part-time tobacco company field
representatives across the country "discounting" ten's of thousand's of packages
and cartons of cigarettes. In
my 17 years in the tobacco industry I can say I knew of absolutely not one tobacco company
representative, and more importantly, not one tobacco company that ALLOWED their
field representatives to "price" these products correctly and legally in any
store across the country. ...And
I know because I asked, at regional meetings held regularly for various
sales campaigns and those regional meetings many times included tobacco company field
representatives from across the country. In
"ball-park" figures, if you take 12,000 representatives X 1,500 30 cent
"discounted" packs per week X 52 weeks X 35 years X 2 cents = $655,800,000! Keep
in mind several factors about this enormous amount of defrauded states' sales tax
revenues...this is just in our "domestic" market! This
does not take into account American tobacco companies sales in Europe, Russia, China and
the Pacific Rim, South America and around the world. This
does not take into account the penalties each and every state and the federal government
can levy against the tobacco companies for fraud & false claims by deliberately
training and instructing their field representatives to falsely mark and price their
pieces of in-store tobacco company pricing advertisements with below "State
Minimum Price" numbers. Where,
in this case, deliberate fraud and false claims has been proven as a the part of the
corporate structure of the tobacco companies in how they train and instruct their field
employees to falsely and incorrectly price their own pieces of in-store tobacco company
advertisements, if you just triple this enormous sum, you arrive at a total of
$1,965,600,000.00 - One Billion Nine Hundred and Sixty Five Million
Dollars...domestically. There
are additional, numerous tobacco industry fraud & false claims policies, practices and
procedures within the tobacco companies that defraud additional billions of dollars,
including blatant state and federal income tax fraud, but I leave that for another time. The
public consciousness has been consumed for a long time with just the issue of
"nicotine addiction," with the heads of the tobacco companies giving that famous
testimony before Congress about how they felt it wasn't addictive That
was a clever rouse to keep the country's attention focused on just that issue alone,
because the “nicotine addiction” issue is rife with conflicting
"studies" as to the validity of nicotine's "addictive" qualities. The
Shuster Project's Executive Director met with a Special Agent of the IRS over 3 years ago
in the law offices of one of that Project's participating lawyers and presented
documentation of the crime, the fraud, although slightly different from the
above-mentioned, yet with penalties and interest once applied by Social Security,
F.I.C.A., states' unemployment insurance and even the IRS itself, has accrued to another
staggering sum of well over $300,000,000.00 utilizing a slightly different calculation,
yet the IRS has consistently attempted to not only avoid engaging the tobacco companies in
order to recover this enormous sum, but they have consistently and ineptly attempted to
discredit the very information that brought them out to learn from us about this fraud in
the first place. Many
of the documents that have been exchanged between the IRS and The Shuster Project-Tobacco
Industry Fraud & False Claims Issues are openly displayed in The Shuster Project web
site at: http://www.rxshuster.org/
The
"length" of this Press Release belies the broad and incredibly serious extent by
which just these few fraud & false claims crimes continue to defraud states' sales tax
revenues and federal income tax fraud, yet continue to be perpetrated to this day,
unabated. Because we at The Shuster Project-Tobacco Industry Fraud & False Claims Issues are so completely dedicated to identifying, cataloging and illustrating these incredible crimes perpetrated by the tobacco companies, we are equally patient and convinced that genuine journalists will act upon this information and the exposes to come. Major “players” are deeply involved in what can only be described as a desperate attempt to now cover up their knowledge of these issues, specifically State Reps. Kevin DelGobbo, Ron San Angelo and, if they at least followed through with their pledge to bring State Rep. Moira Lyons into the loop in terms of bringing to her attention just the above mentioned fraudulent tobacco industry activity and the assistance The Shuster Project clearly explained we were prepared to provide the state of Connecticut and the other adversely affected states along with a request we made to them for help in moving along legislative initiatives The Shuster Project was composing in order TO assist these states, yet after their pledge to “help us in any way they could” the line just as suddenly went “dead.” Even Sen. Jepson, currently running for Governor, now, complains about what did Gov. Rowland know about Enron before the now epic tragedy occurred, yet our Mr. Jepson has received numerous Press Releases and Alerts from The Shuster Project since late 1999 identifying well in excess of over $200 Million Dollars in tobacco industry-defrauded state sales tax revenues and defrauded state income tax revenues and he was in a position to bring about any number of investigations into these serious crimes…yet he chose to do nothing. He can’t deny knowing about this fraudulent activity on the part of the tobacco companies, either, for we have posted on our web site a letter from him thanking us for our work and asking that we keep him informed and that he would look for these issues to “cross his desk.” We thanked him for his response, but asked him not to merely “wait” before these issues crossed his desk for they already had in the form of our Press Releases and Alerts, and that the time to do something was now. And then his “line” went dead. We never heard from him again. One wonders if he had visions of Governor-hood back then and didn’t want to alienate any potential tobacco industry campaign contributor(s)? Only he knows…
THIS SECTION WILL GROW AS WE INDICATE THE NAMES OF THE VARIOUS MEDIA OUTLETS THIS PRESS RELEASE WILL BE SENT TO:
1.) The Connecticut Post - BPT, CT
2.) The Hartford Courant - Hartford, CT Lynne DeLucia, State Coverage delucia@courant.com
3.) The Waterbury Republican-American - Waterbury, CT releases@rep-am.com 4.) The Journal Inquirer - Manchester, CT Ralph Williams, News Editor rwilliams@journalinquirer.com
6.) The News-Times - Danbury, CT Paul Sussman - Managing Editor/News - 203-731-3369 7.) Citizen's News - Naugatuck, CT E-mail: editor@naugatucknews.com 8.) The New Haven Register Jack Kramer , editor, 789-56019.) WSFB TV - Hartford, CT 10.) WTNH TV - New Haven, CT wtnh@wtnh.com 11.) WVIT TV - Hartford, CT 12.) WTIC TV - Hartford, CT - Web site E-mail submission form 13.) WATR Radio News - Waterbury, CT 14.) WELI Radio News - Waterbury, CT 15.) WSTC/WNLK Radio News - Norwalk, CT Lisa Lacerra - News Director
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