By Michael E. Miller
By Allie Conti
By David Villano
By Jose D. Duran
By Michael E. Miller
By Allie Conti
By Kyle Swenson
By Luther Campbell
The smoke from the contraband Cohiba languidly wreathes the bar, mingling with the law-abiding haze produced by locally rolled cigars.
Most of the 147 guests at the Cigar Club of Miami's Wednesday-night smoker at the Astor Hotel are happily puffing Morro Castles and Domino Parks donated by the Caribbean Cigar Company, a Little Havana manufacturer that is about to release its hand-rolled premium items to the tobacco-happy public. But Pete, a tall, friendly, balding man who works in the telecommunications business, found the Cohiba in a cigar shop in Key West and couldn't resist the temptation to flaunt it.
It is illegal to buy, sell, or trade Cuban ci-gars in the United States. It is also against the law to import Cuban cigars purchased in a third country, whether by mail order or on a vacation spree. The ban, naturally, deepens the appeal, and as the cigar market has exploded in the past two years, so too has the demand for Cuban cigars. The result is a burgeoning black market.
"It's like a new drug," grins a young Cuban-American lawyer who asked that his name not be published. A novice smoker, he buys Cubans for the impact they have on people he seeks to impress: clients, friends, cronies. "Anyone can go out and buy a bottle of Dom Perignon," he crows. "A Cuban cigar -- that changes everything."
His main connection, the attorney patiently explains, is a smuggler who operates a one-man delivery service: On the way into Cuba he hauls care packages from exiles to their hard-pressed relatives; on the way out he packs tabacos.
Another smoker tells of an arrangement he has with a co-worker at a resort hotel here. "I got a guy who can get me Montecristos, Romeo y Julietas, Partagas -- all he needs is 24 hours notice."
The anecdotes abound: the mail-order Internet sites; the buddy with the speedboat who regularly visits the Bahamas to stock up; the friend who runs a mini-reassembly line out of his home in South Florida (the tobacco, wrappers, and distinctively designed cigar boxes are shipped separately from a third country to Miami).
Though Cuban cigars purchased on the island typically cost $40 to $300 for a box of 25, stateside markups can range anywhere from $10 to $40 per cigar -- as much as $1000 per box -- depending on geography and a smuggler's marketing skills. Cuban cigars are cheaper in places like Miami and Southern California, more costly in New York and Las Vegas.
The dizzying potential for profit has prompted increasing numbers of ordinary travelers to try to sneak an extra cigar box past U.S. Customs inspectors on the way home from Cuba in the hope of subsidizing their travel expenses. Although the U.S. embargo restricts travel to the island, Cuban Americans on an annual visit, officials on government business, journalists, and representatives of international organizations can legally make the trip. In addition, the Treasury Department grants special licenses to academic researchers, participants in humanitarian aid missions, and others who qualify. Such legal travelers are allowed to bring back $100 worth of Cuban goods -- including cigars.
According to records kept by Customs, inspectors confiscate 20 to 25 boxes of cigars per week from passengers returning from Cuba who are attempting to exceed the legal limit. "The activity seems to have increased this past spring and summer," observes Keith Prager, an assistant special agent in charge in Miami.
During the past two years, the agency made five major busts in South Florida, including a haul of 122 cigar boxes that were seized from a powerboat near Bimini in early August. In June agents in Arizona arrested a Miami man and two associates when they caught the trio trying to peddle 2000 Cuban cigars they had allegedly imported from Cuba via Costa Rica. The stogies were brought into Miami International Airport on commercial flights and then shipped across the country, according to Terry Kirkpatrick, the supervisory special agent for the Office of Investigations in Nogales, Arizona.
"They were basically brokers," Kirkpatrick explains. "They were smuggling almost on a weekly basis." The three were charged with violating the 1917 Trading with the Enemy Act, which carries a maximum penalty of $250,000 and ten years in jail. The case is pending.
Though they are reluctant to say so publicly, federal prosecutors tend not to file criminal charges for stashes of fewer than 100 boxes. According to federal sources, small caches are confiscated and destroyed, and the infraction is ignored.
Even smugglers caught with large shipments are unlikely to face harsh penalties. In August of last year Richard Sperandio, a New York boat owner who attempted to smuggle 102 boxes of cigars into Key West on his 37-foot sport-fisherman -- one of the biggest cigar seizures in Conch history -- pleaded guilty and was sentenced to a year's probation and 50 hours of community service.
Two Bahamians arrested three months ago at the Thrift Lodge Hotel in Miami Springs when customs agents found 114 cigar boxes in their hotel room were deported after pleading guilty to conspiracy charges. The Bahamians had hidden the cigars in their luggage when they came through Miami International Airport.
"These are criminals of financial opportunity," says Steven Mocsary, Customs resident agent in charge in Key West. "They aren't the hard-core criminal types who play hardball with law enforcement. When they're caught, they tend to fess up."
While most smugglers are amateurs, a few have recently begun to polish their operations. "We get solicited all the time by people who want to sell both legitimate and counterfeit cigars," says Oscar Boruchin, owner of Mike's Cigars in Bay Harbor Islands, a retailer/wholesaler and the second-largest distributor of premium cigars in the nation. Most just call on the phone, Boruchin reports, though a few actually drop by the store to display their wares. About six months ago, Boruchin recalls, he was approached by a man who had prepared a glossy brochure advertising several types of Cuban cigars. "It was like an organized company," he marvels. "I got the feeling this was real. I said, 'The owner is not here, give me your telephone number.' He walked out."
Shareef Malnik, owner of the Forge, an upscale Beach restaurant where glowing stogies are de rigueur, says most of the so-called Cubans he encounters on South Beach are fake. "So many people are selling these things it's ridiculous," chortles Malnik, who also owns the Cuba Club, a private smokers' club next door that caters to celebrities. "A guy came into the club the other day and says, 'How do you like this? It's a real Cohiba.' He'd bought it at another restaurant on the Beach. I'm like the last guy you would say something like that to. It was the ugliest thing I had ever seen."
Boruchin and others say that the quality of the real Cubans has become so inconsistent that a harsh-tasting, seemingly counterfeit Cohiba might actually be genuine. Malnik points out that some of the many so-called fake Cubans appear to have been purchased on the black market on the island, where the odds are equally good that the cigars were stolen from an official cigar factory or rolled at home from tobacco refuse. "In Havana they are Cuban," he jokes. "They're just fake Cuban Cubans."
Mike Sheehan, a spokesman for Customs in Miami, reports "a phenomenal amount" of counterfeiting. In July, he says, agents caught someone who was relabeling Honduran cigars so as to appear Cuban. "If I'm interested in making money, do I go to the trouble of setting up a network to sell Cuban cigars here? Or do I stay home, go to the local drug store, buy some two-dollar cigars, unwrap them, and just print out my own band?" Sheehan posits. "Your risk factor is reduced dramatically."
Back at the Astor, Pete offers his Cohiba for a puff, assuring other smokers of its authenticity. It tastes smooth and mellow. A hotel employee watches impassively but later confides, "I have twelve Cohibas at home, but I forgot to bring them. I would have made $240 bucks, easy.