LTV investigative journalists infiltrate Riga Central Market cigarette mafia

Take note – story published 4 years and 5 months ago

LTV's investigative journalism program Forbidden Method (Aizliegtais Paņēmiens) has produced another notable scoop after conducting a six-month operation in which reporters infiltrated the Riga Central Market's illicit cigarette mafia, releasing the first of several episodes covering the 12,000-euro-per-month operation on November 25.

The undercover operation was undertaken with the help of the State Police Rīga Regional Criminal Police Department.

The area between the pedestrian tunnel and central market meat pavilion has been rented out to a company called Tirdzniecības nams Latgales priekšpilsēta (Latgale Suburb Trading House) for several years by Central Market management. The investigative journalism team rented out a stand for selling clothes specifically in this area, as almost any person walking by will be approached here by men milling around offering cigarettes for sale. They filmed the whole process on hidden cameras.

Eventually one of the journalists was approached by a stand owner to ask whether he wouldn't be interested in making some money on the side, and gave him the phone number for a Russian-speaking boss, Tigrans.

“I need a normal guy, reliable, whom I can rely on. In the beginning I don't want you to be in the market. I need you to be on the streets in a car,” Tigrans told the investigative journalist.

Every morning Tigrans brings around 70 blocks of cigarette cartons to the market in his car, which he parks nearby. He brings around 20 blocks into the market at a time to minimize the risk if caught by the police. The 600% markup allows a salesperson to make 2,700 euros a month - more than double the average national wage - and a boss like Tigrans to make a tax-free 12,000 euros a month. These illicitly trafficked cigarettes lose the state budget an estimated 470,000 euros a month in taxes.

When the undercover journalists went to Central Market security to complain about the cigarette sales, they were told that as the area is controlled by a private tenant (which doesn't have its own security subcontractor), only the State Police has the authority to do anything about the situation.

Central Market Board Chair Artis Druvinieks also commented that he doesn't like the situation, but that there is nothing the administration can do, that it needs to be solved at the state level.

“The problem is that our regulations are such that if we see an infraction, write out a fine, some even have 15 - 20 thousand in penalties,” said Druvinieks.

The Central Market administration, however, are the ones who keep renewing the lease with the problematic tenant. The first rental contract was signed in 1998 and has been renewed countless times.

Search and siezure

State Police confiscated not only illicit cigarettes, but also more than 40,000 euros while conducting 89 searches on November 21 and 22 at the Riga Central Market territory, according to the police.

Twelve people were detained under suspicion of illegally storing, transporting or sale of excise goods as an organized group. Four people were arrested and the criminal proceedings continue. As a result of the 89 searches of the market territory and other Rīga addresses 8,210 units of tobacco products and 11 liters of alcoholic drinks without excise duty stamps were seized.

The searches also confiscated six firearms and 249 ammunition units, various data carriers and accounting documents, as well as a BMW X3 automobile and other objects related to the illegal activity associated with the searches.

Of those arrested, two persons have previously had contact with the police, with one having been fined 49 times for the illicit trafficking of excise goods. A criminal process has begun regarding the illicit storage, trafficking or sale of alcoholic drinks or tobacco products as an organized group. Possible penalties include being arrested for up to five years, forced labor or a monetary fine, confiscated property and up to three years of probation.

The police emphasized that the fight against the illicit trafficking of excise goods has always been a priority, and that a lot or work has been invested. At the same time they urge residents to be active in notifying police about locations where illicit goods are possibly being sold.

As previously reported, the Riga Central Market was searched on November 21 and several people were arrested, according to the State Police. LTV adds that the market’s Internal Security Department Director Maksims Danovskis was also searched. He was appointed to the board only a week earlier.

The head of the State Police urged the Rīga City Council to consider breaking their rental contract with the private company. Later the Riga Central Market board decided to consider breaking the contract with the private tenant managing the area between the market and station tunnel.

On November 26 Rīga mayor Oļegs Burovs responded to the revelations by giving the central market's management until November 28 to submit a plan for termination of the contract with SIA Latgale Suburb Trading House and to provide explanations to the Riga City Construction Board on what it plans to do with the market pavilions subsequently.

"I do not see an opportunity to continue cooperation with the lessee, whose territory is subject to illegal activities, which have been recorded by both the State Police and Latvian television," Burovs said.

"The square between the Central Station and Stockmann [department store] is one of the entrances to the Central Market, used by many tourists, and can be said to be a market visiting card that looks very unattractive, while the market pavilions are like slums,” said Burovs, adding that plans for the redevelopment of the area were needed.

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