Smoking out the gangs in the illegal tobacco trade

When I first decided to investigate the illicit tobacco trade, little did I realise the full extent of the criminality I would find myself exposing.

I knew the trade had changed over the years.

It used to be the domain of the small-time "white van man", bringing back into the country a few extra cigarettes to sell - his profits borne out of not paying the tax due on them.

I knew it was now an industry controlled and funded by an international network of organised crime gangs. And I knew that most of the counterfeit tobacco and cigarettes came from China.

From hidden, and often underground, factories, the black market tobacco is processed in squalid conditions, packaged up into counterfeited wrappings, hidden in concealments and posted around the world.

I wanted to know exactly how the gangs on the ground operated.

Who were the foot soldiers, where did their supplies come from, and exactly who were the money men funding the whole operation?

The only way to find this out was to secretly film the gangs as they plied their trade and try to work my way up the criminal supply chain.

My first tip-off took me to a gang which operated in Ayrshire.

Punitive measures

One of the most lucrative selling points for the illegal tobacco traders is open-air markets. They're always busy with buyers looking for a bargain and, importantly, it's cash-only trade.

Higgins stocks up Scullion
Image caption Allan Higgins is pictured stocking up John Scullion

I set up secret cameras outside Ayr Market and, within minutes, one of the men we had been tipped off about appeared.

John Scullion has previous convictions for selling counterfeit cigarettes. As I watched, customer after customer approach him.

It was clear the profits to be made were large and the possible punitive measures did not seem an effective deterrent.

Every 20 minutes, another man would approach him and stock him up with product.

This was Allan Higgins, a convicted thief. I watched as he would take the order from Scullion of what product was needed, then off he would go to a nearby vehicle or lockup to collect it all.

And that was when I noticed the next link up the chain.

The money man. In this case, it was Richard Grant, a convicted fraudster.

I watched as he was repeatedly handed money by Higgins. Roll upon roll of £20 and £50 notes, discreetly passed over and pocketed. And all of it caught on camera.

I showed my footage to Roy Ramm, the former commander of Scotland Yard.

For 30 years he has watched the illicit tobacco trade explode from a small-time cottage industry to a multi-billion pound trade of global proportions.

Expensive place

I wanted him to talk me through how he saw the gang operating. I showed him the footage of Higgins passing on the money to Richard Grant.

"This is not Robin Hood and his band of Merry Men," he told me.

"It's a management chain isn't it? You know, he's the cashier, he's taking the money.

"There's probably a discussion about, how much stock have you got, what do you need? And this guy can pull it on.

"There is only so much that Higgins can carry about his person, only so much that Scullion can hold.

"So somebody's going to bring more stock to the market. At the rate he's doing transactions, Scullion's pockets would have been emptied ages ago."

The UK is the second most expensive place to smoke in the world.

That's because 80% of the price is tax. So the illegal tobacco traders are pocketing that money on top of what they're already making, making it a hugely lucrative business.

Roy Ramm said: "What you're seeing is money being sucked out of the revenue.

Roy Ramm
Image caption Roy Ramm worked as a commander at Scotland Yard

"This is undermining the tax system and whether you're a smoker or not. You and I and everybody else in that market are paying for what these people are doing. We are funding organised crime."

In order to try to find who the next rung on the ladder was after Richard Grant, I had to buy from the gang.

They sold me Golden Virginia tobacco for £6.50 - I should be paying £12. And I paid £3.50 for 20 cigarettes, almost half what they should be.

It was only after buying from the Ayrshire gang, that I realised I had inadvertently stumbled across the one piece of evidence which would link them to a major organised Chinese crime group which had infiltrated the UK.

On the pouch of counterfeit Golden Virginia I had bought from Scullion, I noticed there was a tax stamp, giving the impression that the goods had been declared.

The code on the stamp was 7069. I had seen that number before. It was the same tax stamp code we had filmed only weeks earlier in a Chinese counterfeit tobacco factory in Glasgow.

This paper trail confirmed that the Ayr gang was being supplied by an international crime group.

Roy Ramm told me: "This is as international as organised crime gets. You know, the links around the world are exactly the same for this as they are for drugs trafficking, arms trafficking, people trafficking.

"In many ways it's even more sophisticated because there's counterfeiting going on, there's the manufacture, not just of the tobacco, but of the wrappings, of the customs seals, of the revenue tags, that are put on to packets of cigarettes.

"This is very cleverly done."

The Ayr gang was making a lot of money. But I knew that in Glasgow, there was another gang which would dwarf Higgins and his team.

The Barras in Glasgow is one of the biggest open-air markets in Scotland.

It's well known to be a haven for criminality, regularly raided by police and trading standards for stolen goods, counterfeit designer clothing and pirate DVDs.

'Risk averse'

I knew a tobacco gang operated there, but to try to get a sense of just how big and how organised they were, I once again had to film them secretly.

Parked just a few metres away from them, the scale and the audacity of this gang was immediately evident to me.

I filmed as the gang went back and forward to a red Rover and a black BMW to stock up, the cigarettes and tobacco hidden in boxes in the boot.

Counterfeit tax stamp codes found in Glasgow tobacco factory
Image caption Counterfeit tax stamp codes were found in a Glasgow tobacco factory

The leaders appeared to be a woman stallholder and a man who worked alongside her.

I wanted to get as close to the gang as I could so I wore a secret camera. Secretly filming criminals is always risky and this would be no exception.

I bought tobacco and cigarettes from them which would later be tested and shown to be counterfeit and full of highly deadly toxins.

The woman also offered me a free sample of an illegal cigarette.

I met with Dr Rob Hornsby, a criminologist at Northumbria University. He has studied the bigger crime gangs as they've gained a foothold in the UK.

"These are criminal entrepreneurs and they're market savvy and they're risk savvy and they're risk averse.

"They will jump between a variety of commodities, weighing up the risks to not only their freedom but also to their business objectives.

"And maximum sentence, seven years? Well, it's not a great risk, is it, for the profits involved?"

After filming both the Barras and Ayr gangs over a couple of months, it was time to put the evidence we had gathered to them.

My first stop was Ayr Market.

'Taking risks'

Sadly, Higgins the supplier, and Grant the money man, were nowhere to be seen.

But Scullion was and so I approached him with the counterfeit tobacco he'd sold me and asked for my money back.

Within a split second, he had taken to his feet, and run off.

My next stop was the Barras Market in Glasgow.

I knew from experience of filming at the Barras that cameras weren't always welcome and so, armed with two security guys, we approached the industrial unit where we knew the stock was kept.

The woman stallholder wasn't there, but her sidekick was.

I showed him the counterfeit tobacco he'd sold me and asked him for my money back. That was when everything changed.

A man who had followed me into the industrial unit spotted the camera and went for it, violently shoving the security man who had tried to intervene.

Seconds later, the man attacked me, injuring my hand as I pulled it up to protect my face.

Unsatisfied with that, he then grabbed a six-foot metal pole and ran at me and the crew with it.

Investigating criminal gangs like these ones always carry risks. And these are risks you have to add up.

Are they worth taking in order to get the footage, to get the story told?

After looking back at the hours of evidence I had recorded, and knowing the level of criminality we had discovered, which affects each and every one of us, I knew the answer.

BBC Scotland Investigates: Smoking and the Bandits will be broadcast on Wednesday 19 January at 1930 GMT on BBC One Scotland. It will be available on the BBC iPlayer for a week afterwards.

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