After its recent PR troubles for missing Christmas deliveries, FedEx’s is back in the news again.  In possibly the final major act by the Bloomberg administration, New York City has sued FedEx Corp, accusing it of illegally delivering millions of contraband cigarettes to people's homes and seeking $52 million in fines and unpaid taxes.  The city is accusing FedEx of knowingly violating the terms of a 2006 agreement with New York's attorney general in which the company promised to stop all deliveries of mail-order cigarettes to state residents. 

The city claims Fed-ex violated this agreement by shipping cigarettes for various sellers including Shinnecock Smoke Shop, located on the Shinnecock Indian Nation reservation in Southampton, New York.  Indian reservations are exempt from charging sales tax.

Bloomberg administrative officials said FedEx delivered about 19.5 tons, or 55,000 cartons, of cigarettes to city residents in nearly 10,000 shipments over a seven year period from 2005 to 2012. This deprived the city of a $15 excise tax on each carton.

In response, FedEx stated that  “FedEx prohibits the shipment of tobacco direct to consumers and believes the claims made by the city are overstated and not founded in law... FedEx intends to defend this case while continuing to work with authorities to stop prohibited tobacco shipments."

Bloomberg’s 12 years as mayor will come to an end in 2-days when Mayor-elect Bill de Blasio takes office.

After its recent PR troubles for missing Christmas deliveries, FedEx’s is back in the news again.  In possibly the final major act by the Bloomberg administration, New York City has sued FedEx Corp, accusing it of illegally delivering millions of contraband cigarettes to people's homes and seeking $52 million in fines and unpaid taxes.  The city is accusing FedEx of knowingly violating the terms of a 2006 agreement with New York's attorney general in which the company promised to stop all deliveries of mail-order cigarettes to state residents. 

The city claims Fed-ex violated this agreement by shipping cigarettes for various sellers including Shinnecock Smoke Shop, located on the Shinnecock Indian Nation reservation in Southampton, New York.  Indian reservations are exempt from charging sales tax.

Bloomberg administrative officials said FedEx delivered about 19.5 tons, or 55,000 cartons, of cigarettes to city residents in nearly 10,000 shipments over a seven year period from 2005 to 2012. This deprived the city of a $15 excise tax on each carton.

In response, FedEx stated that  “FedEx prohibits the shipment of tobacco direct to consumers and believes the claims made by the city are overstated and not founded in law... FedEx intends to defend this case while continuing to work with authorities to stop prohibited tobacco shipments."

Bloomberg’s 12 years as mayor will come to an end in 2-days when Mayor-elect Bill de Blasio takes office.