BIRMINGHAM, Ala. (AP) — Jefferson County authorities have arrested two men accused of buying thousands of cheap cigars from Asia, then selling them across the Southeast in fake name-brand packaging.
Jefferson County Sheriff Mike Hale said the scheme may have cost untold amounts in tax revenues and profits for companies like Swisher International and John Middleton Co. Both companies worked with authorities during a four-month investigation.
"It has to impact the bottom line in the hundreds of thousands, if not millions, of dollars in lost revenues to the company, tax revenues and on down," Hale said.
Jegil Wilissac Dugger, 30, of McCalla and Faisal Hassan Elnaham, 32, of Homewood have been charged with multiple counts of theft of trademark in connection with the scheme.
Bond for both was set at $600,000. Dugger is still in jail, but Elnaham posted bond on Friday. When he was arrested, Dugger was out of jail on bond on charges he promoted gambling.
Authorities said the two would buy thousands of cheap and uninspected cigars from India and packaging from China. Then they would repackage the cigars as name brands like Swisher Sweets and sell them to stores across the Southeast.
Authorities confiscated about $75,000 worth of products during the investigation.
Dugger and Elnaham did not have listed telephone numbers. It was not clear from jail records Tuesday whether either had an attorney.
Sheriff's spokesman Randy Christian said the Jefferson County investigation began in March, when a customer purchased fake cigars, recognized the poor quality and sent them to Swisher International.
The proper packaging has security identifiers that the average customer would never notice, he said.
"This is how Swisher caught on that they were being scammed," he said.