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Secondhand Smokes

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"Smoke? Smoke?" By now, everyone knows where to go to avoid paying up to $8 for a pack of cigarettes (the Web, Indian reservations, Indian reservations on the Web . . .). But, as with many things in New York, it's so much more convenient to have someone else do the legwork for you. Hence the rapid emergence of a new class of dealer: the white-collar nicotine bootlegger.

On a sweltering afternoon, in front of the modernist glass façade of 350 Madison Avenue, employees of a hedge-fund brokerage huddled together, dragging on their tax-free Marlboro Lights. Where did the cigs come from? One name rang out: "Donny the Accountant."

"It's a New York–savvy thing to do, to buy something for less than the going rate, just as we try to pay the lowest price for a share of stock," said Donny, who snaps up ten to twenty cartons at $32 each from a Website and solicits orders from his fellow accountants.

"Interest has really grown this week -- it's time for another order," added Donny, who distributes the smokes at cost, wary of making a profit on goods from an Indian reservation, which, he believes, could mean breaking the law. (Yes, there are still accountants who worry about the law.) "When the cartons come, I'm like Santa Claus."

"I don't pay the tax," one finance man spit out defiantly. "I have a summer home in Pennsylvania, and cigarettes go for $28 a carton there," he said while lighting up with his boss, Bob Martz, a brokerage vice-president, in front of their building. "I pay him what they cost, he works for me," said Martz -- at which point the bootlegging broker smiled and added, "There are others on the list."

Many interviewed feared giving out their names, citing what could be an urban legend in the making -- tax bills that comes out of the blue to people who've bought goods out of state. While no one had received such a document, a few spoke ominously of "someone who did."

But Linda Massarella, a newspaper writer, sees no danger (or shame) in making a buck off her co-workers. When she returns from a trip to Canada, she says, "I will buy some Camel Lights at the border, and I'll sell them for $5 a pack. It'll help pay for my trip."


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