Ciudad del Este buying Ecstasy

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Ciudad del Este buying Ecstasy

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Ciudad del Este buying Ecstasy

Here the soil is red, the terrain is flat with ample soybean and mate leaf plantations. Men chatter among themselves sitting in small plazas and barber shops. The streets downtown are clean, the houses are freshly painted and pay phones are decorated with natural motifs — you can call from the gut of a fish or the chest of a parrot. But no product, police say, is more widely smuggled through this city, and more profitable to smugglers, than Paraguayan cigarettes. The smugglers feed an illicit trade that injects billions of cigarettes into Sao Paulo, Rio de Janeiro, and other large Brazilian cities, where the cheap, untaxed Paraguayan sticks account for 20 percent of the entire cigarette market. A few reap millions from the illicit trade. Starting in , Silveira cut deals with tobacco traders in Arizona and smoke shop owners in Indian reservations in Washington state to smuggle millions of Paraguayan-made contraband cigarettes through the ports of Miami, Norfolk, and Baltimore. The sticks were then distributed across the country and the profits were laundered to bank accounts in Paraguay and the United States. Silveira not only manufactured the cigarettes, U. His former associates describe him as smart and cold, with an eye for fine suits. The tale of Roque Silveira is emblematic of the criminal nature and global reach of the teeming Paraguayan cigarette industry, one that experts and law enforcement officials say is, largely, set up for and devoted to transnational smuggling. The cigarettes are flooding Brazil and Argentina, where taxes are much higher than in Paraguay, and have turned up as far away as Ireland. Industry sources say manufacturing cigarettes in Paraguay today is cheaper than in China — the top producer of contraband smokes — while the quality of the product is far superior. In contrast, only a handful of local brands are sold in the domestic market, where smokers pay some of the lowest cigarette taxes in the world. Multinational tobacco firms are alarmed at the size and speed at which the Paraguayans have built up an off-the-books industry. Investigators for Big Tobacco say Paraguayan cigarettes are shipped to known Caribbean smuggling hubs like Aruba and Panama, where they believe the shipments enter the black market. In Irish customs seized a container loaded with five million Paraguayan cigarettes concealed in bales of plywood. Paraguayan government officials say that if all cigarette-making machines in Paraguay were to work at maximum output, the country could produce up to billion sticks annually — enough to supply about two-thirds of the Brazilian market. Smuggling is made easy in Paraguay, officials confide. There is virtually no industry regulation, and illegal manufacturers and traffickers are often insulated from prosecution by those in power. Bankers, politicians, and soccer club barons are themselves involved in the business and make hefty campaign contributions. In February, the president named a convicted cigarette smuggler as his Air Force intelligence chief. Lugo later backed off amidst intense criticism. Before he was forced from power in in a military coup, Stroessner made the country a sanctuary for Nazi war criminals, deposed dictators, and smugglers. A corridor for drugs, weapons, stolen cars, and any imaginable knock-off — from CDs to Viagra — this region of thick, green rainforests and spectacular waterfalls has also become the backdrop for the booming trade in smuggled and counterfeit cigarettes made in Paraguay. Late-model Mercedes and BMWs sporting polarized windows rush by and scores of motor scooters, some of them transporting entire families, weave through the ubiquitous traffic jams. Cigarette factories are often linked to money exchange houses where profits of the contraband are laundered, according to former factory managers and court records. Attorney James Warwick. Several Paraguayan cigarette firms have conveniently built factories in Ciudad del Este and nearby Hernandarias. Brazilians stepped up controls at the border in , so smugglers switched from the road to the water. To reach some of these illicit piers, one must navigate a maze of tortuous and narrow red-dirt paths through dense underbrush. Reporters were told the smugglers were taking the day off to mourn one of their own, a former policeman, who had died in a car accident the day before. The loud contraption pulverizes about , seized cigarette packs every day — the remains of which are used in fertilizers and to build roads. The flow of Paraguayan contraband cigarettes to Brazil is billion sticks annually, experts estimate. In contrast, says Tragancin, legal exports of cigarettes to Brazil are zero. Besides the public health threat it poses, cigarette smuggling is also bolstering violent organized crime groups that operate complex networks along the border with Brazil. International smugglers quickly spotted an opportunity in the booming Paraguayan illicit tobacco trade. Washington state-based cigarette wholesaler Stormmy Paul, a Tulalip Indian, flew to Paraguay in to cut a deal. He had been buying Chinese cigarettes, including counterfeit Marlboros, and re-selling them tax-free to smoke shops in his state, but he wanted a better combination of price and quality. A business partner from Brazil offered to make some introductions south of the border. In Paraguay, Paul visited a handful of cigarette factories. The visitors were greeted by owner Roque Silveira and feted with a lavish barbecue. By the time dinner was completed an agreement had been sealed. He found Silveira impressive. Starting in late , the ring of 11 people, most of them American tobacco traders, smuggled into the United States more than million Paraguayan cigarettes, for distribution from California to North Carolina, according to court records. The ring was brought down in spring as the smugglers convened in Las Vegas. Silveira, Paul, and the others were indicted on a total of 50 counts of conspiracy, smuggling, trafficking, and money laundering. Silveira paid a fine and, to the amazement of Paraguayans, was let go. Around the same time the Americans gave Silveira a slap on the wrist, Brazilian prosecutors indicted him in one of the largest-ever cigarette smuggling investigations in that country. Codenamed Operation Fireball , the sting rounded up more than 90 people in 11 Brazilian states. In the indictment for the case, Silveira was fingered as a major supplier of contraband cigarettes who allegedly controlled three different networks that delivered the sticks to the populous Rio Grande do Sul state. T, Brazilian police say. Two weeks after Operation Fireball, a Brazilian customs agent was murdered in a bleak, sparsely populated region of the border called Rio do Morte — River of the Dead. An anonymous caller tipped local police to a burned-out SUV on the road. He even owned a plane. But Zamo had begun to fear discovery and finally backed out of the ring, police said. Paraguayan cigarette manufacturers like to point out that they are just filling a void created by large multinational tobacco companies. In the s, British American Tobacco and Philip Morris ran independent schemes in which their subsidiaries in Brazil and Argentina legally exported billions of cigarettes to Paraguay. The sticks were then smuggled back to these two higher-tax countries and sold on the black market. The practice ended in when the Brazilian government raised the cigarette export taxes dramatically to discourage the illegal trade. Following the tax increase, dozens of cigarette factories opened in Paraguay, many of them owned fully or in part by Brazilians. Within three years, Paraguay was home to more than 30 cigarette manufacturing plants, some of which counterfeited well-known international brands. The local counterfeiting business has dropped markedly in recent years as cigarette makers realized that there was a market — in Brazil and around the world — for the cheap Paraguayan brands. The practice also carries less risk of being pursued by Big Tobacco companies for trademark violation. Today the number of manufacturing facilities has more than halved, but not so production. The factory, located a short drive north from Ciudad del Este in the city of Hernandarias, supplies almost half of the Paraguayan market with its two flagship brands, Kentucky and Palermo. But at the same time as it serves a legitimate market, the company allegedly supplies large quantities of cigarettes that end up smuggled to Brazil and Argentina. Customs officials in those two countries told ICIJ they seize more contraband cigarettes from Tabesa than any other Paraguayan company. In , Tabesa was mentioned in Operation Fireball as one of the factories whose cigarettes were allegedly smuggled to Brazil. Paraguayan businessman Horacio Manuel Cartes is widely reported to be the owner of Tabesa, and is listed as a top shareholder and director by Informconf, a Paraguay business database. Cartes started as a cigarette distributor two decades ago. Since then he has built an empire that includes a bank, a soccer club, and several agricultural ventures — some of these formally owned by family members and business associates. Ortiz said that Tabesa does not sell directly to vendors but rather to four or five wholesale distributors. He named two wholesale firms, one of which, Tabacos del Paraguay, is affiliated with Tabesa. Last year, the company broke into the U. Palermo is also available online through websites selling cigarettes from Indian reservations in New York, but Ortiz denied that Tabesa is selling to Native Americans directly. Saconato says people were arrested in in connection with smuggling, yet only two men were convicted. That night smugglers celebrated by launching fireworks on the riverside, officials say. He has become a mythical character of sorts, with town residents claiming from time to time to have spotted him. After Operation Fireball, Silveira became a ghost, Brazilian police say, but no one believes he has retired from the cigarette trade. Talavera says he not only knows Silveira, he is also his business associate. Paraguayan prosecutors accused Talavera of reporting fake cigarette exports to Brazil in order to avoid paying taxes on imported cigarette manufacturing supplies. He has also been fingered by Paraguayan officials as a counterfeiter, a charge he denies. He says that wholesalers based in Panama buy from him and then ship the cigarettes overseas. I care that I sell. Investigations Tobacco Underground. Beneath this surface, however, the city shows a more disturbing element. The trade goes global International smugglers quickly spotted an opportunity in the booming Paraguayan illicit tobacco trade. River of the dead Around the same time the Americans gave Silveira a slap on the wrist, Brazilian prosecutors indicted him in one of the largest-ever cigarette smuggling investigations in that country. Filling Big Tobacco's shoes Paraguayan cigarette manufacturers like to point out that they are just filling a void created by large multinational tobacco companies. Contributors Daniel Santoro. ICIJ is dedicated to ensuring all reports we publish are accurate. If you believe you have found an inaccuracy let us know.

Ciudad del Este buying Ecstasy