About illicit tobacco
Illicit tobacco is a form of organised crime and includes:
- tobacco grown, manufactured or produced in Australia without a licence
- imported tobacco for which no duty has been paid.
With our cross-agency partners, we manage the risk associated with domestically grown and manufactured illicit tobacco products.
Our case studies show how we achieve this; from uncovering illicit tobacco growing operations to prosecuting the organised criminals involved.
Stay up to date with the latest illicit tobacco case studies by subscribing to our general email updates.
If you suspect illicit tobacco is being grown or manufactured in your community, confidentially report it to us by making a tip-off or phoning 1800 060 062.
Duo sentenced for illicit tobacco crime
In December 2024, two Victorian men, Dominic Fotia and Omar Chkhaidem, were sentenced for their roles in an illicit tobacco manufacturing syndicate that was operating across 2 properties in the Goulburn Valley.
The sentencing follows a joint operation between the ATO and Victoria Police in 2017 where a total of 10.75 tonnes of illicit tobacco was seized across the 2 properties. Officers raided a property in Cobram and found approximately 6,250 kilos of tobacco. Following this, the ATO executed a second search warrant where another tobacco crop of approximately 4,500 kilos was seized. The total combined potential excise value was more than $4.1 million.
The second property was uncovered following a tip-off from a member of the community. Community tip-offs are one of our best sources of information when it comes to letting us know about suspected fraud or other concerning behaviour. If you suspect that illicit tobacco is being grown or manufactured in your community, report it to the ATO online at www.ato.gov.au/tipoff, or phone 1800 060 062.
When sentencing the men, Judge Peter Rozen said the ‘tobacco planting operation was well planned and sophisticated, the amount of tax evasion was significant and that the sole motivation was for financial gain.’
Assistant Commissioner Jade Hawkins says this outcome is another example where community tip-offs can be one of the most effective sources of intel to help extinguish and dismantle these pervasive illicit tobacco networks.
Signs that illicit tobacco is growing nearby include:
- intense labour production typically between November and May
- suspicious enquiries about land for lease
- unexplained use of water resources, and
- large crops of leafy plants that may resemble kale, cabbage or corn.
Visit www.ato.gov.au/illicittobacco and download our illegal tobacco infographic (PDF, 695KB)This link will download a file for more information about illicit tobacco and how we are fighting back.
Man found guilty of possessing illegal tobacco
Duy Cao has been sentenced to 12 months imprisonment and fined $10,000 for possession of illicit tobacco products. The sentence is to be served as an Intensive Correction Order in the community and includes 250 hours of community service.
On 27 April 2023, New South Wales (NSW) Police and Fire and Rescue NSW attended to a fire that had started in a freezer at the back of Mr Cao’s home. After the fire was extinguished, the emergency service officers found the freezer contained sealed bags of illicit loose-leaf tobacco.
Upon further inspection of the house, police officers located numerous carboard boxes which contained unopened packets of cigarettes and a travel bag filled with rolls of tobacco. Shortly after, police officers attended the Tobacconist operated by Mr Cao and located further sealed bags of illicit loose-leaf tobacco and unopened packets of illicit cigarettes.
In total, police found over 458 kilograms of loose-leaf tobacco and 3,730,380 illicit cigarettes. The total excise avoided was over $5.1 million.
Mr Cao was charged with one count of possession of 100 kilograms or more of illicit tobacco and one count of possession of 5 kilograms or more of illicit tobacco.
Acting Assistant Commissioner Justin Clarke said, 'Those who choose to become involved in the sale of illegal tobacco are supporting organised criminals to fund other significant criminal activities. These criminals take vital funding away from essential community services such as healthcare, education and infrastructure.'
For more information about illicit tobacco in the retail sector see our illegal tobacco infographic (PDF, 695KB)This link will download a file.
$2.2 million in illicit tobacco taken for a ride
Basel Hboos has been sentenced at the Sydney Downing Centre Court for possession of illicit tobacco products. He was sentenced to 12 months imprisonment but was released immediately and will serve a 12 month community corrections order. The court also ordered the forfeiture of his truck.
In June 2022, NSW police officers on patrol investigated Mr Hboos’ truck which was suspiciously parked beside a road in the suburb of Yennora.
The officers searched Mr Hboos’ truck and found 1,981,200 illicit tobacco cigarettes with a total excise value of more than $2.2 million.
Mr Hboos later faced court and was charged with possessing 500 kilograms or more of illicit tobacco.
Assistant Commissioner Jade Hawkins said that while illicit tobacco may appear to be cheaper, it comes at a cost.
‘Illicit tobacco takes away from community services such as health, education and infrastructure. It all adds up, and we will work to remove illicit tobacco from crop to shop.’
‘We continue to work with federal and state government and law enforcement agencies, like the NSW Police, to stamp out illicit tobacco.’
For more information about illicit tobacco in the retail space see our illegal tobacco infographic (PDF, 695KB)This link will download a file.
Tobacco crop gets the chop
In March 2023, the ATO joined forces with Victoria Police to raid a property in Bunbartha, Victoria. When officers arrived at the property, they discovered 4 distinct tobacco plots, consisting of over 10 acres of mature tobacco plants.
Mature tobacco plants range between 1.5 to 2.5 metres tall, leafy and can be easily recognised by their distinct long, trumpet-shaped white-pinkish flowers. They may also resemble kale, cabbage or corn.
Officers measured the area of each plot and undertook sampling on the leaves and flowers to confirm they were illicit tobacco plants. The crops were then destroyed.
Weighing around 11,458 kilograms, the crops had a potential excise value of over $19 million.
Assistant Commissioner Jade Hawkins says this raid should serve as a warning to anyone considering participating in the illicit tobacco trade.
'Engaging in the illicit tobacco trade is a serious offence and is far from victimless. It takes vital funding away from essential community services and instead channels it directly into the hands of organised crime,' Ms Hawkins said.
'At the ATO, we have advanced capabilities that allow us to detect, disrupt and dismantle illicit tobacco operations.'
It has been illegal to grow tobacco in Australia for more than a decade. Penalties for growing, selling or possessing illicit tobacco are significant. If convicted, criminals may face up to 10 years’ imprisonment, a fine of up to $412,500, or both.
The key signs you can look for that indicate illicit tobacco is growing in an area include:
- intense labour production typically between November and May
- large, leafy plants that resemble kale, cabbage or corn and may have a pink flower growing on top
- unexplained and potentially unlawful use of water resources
- unusual enquiries about land for lease.
If you recognise these signs, report it to the ATO online at www.ato.gov.au/tipoff, or phone 1800 060 062.
Visit www.ato.gov.au/illicittobacco and download our illegal tobacco infographic (PDF, 695KB)This link will download a file for more information about illicit tobacco and how we are fighting back.
'Hard to find' illicit tobacco grower sentenced
A 54-year-old man, Imad Fatrouni, has been sentenced to a 16-month suspended intensive correction order and completion of 150 hours community service for being involved in a large-scale illicit tobacco manufacturing operation in Peats Ridge, NSW.
In April 2020, officers from the ATO and NSW Police Force executed a search warrant at a rural property, following a community tip-off.
At the time of the search warrants, 69,000 kilograms of illicit tobacco crops, equal to the weight of approximately 3 bulldozers, along with tobacco leaf located in 2 large greenhouses and 2 drying kilns were seized and destroyed. Equipment from a large industrial shed housing a tobacco production setup and other tobacco related machinery were also seized.
An associate of Mr Fatrouni advised police that they ‘would not catch up with him as he is hard to find’. However, Mr Fatrouni did eventually face court and was charged with:
- producing 500 kilograms or more of tobacco plant
- possessing 500 kilograms or more of tobacco leaf.
For those who believe they are outside the law and continue to grow and sell illicit tobacco, our message is clear – it’s only a matter of time before you are caught.
Mr Fatrouni knew this himself, with analysis of his seized phone finding a link to a media article about an illicit tobacco seizure on an unrelated farm. An omen he clearly ignored.
We work with federal and state government and law enforcement agencies, like the NSW Police Force, to stamp out illicit tobacco. Illicit tobacco operations can take time to investigate, uncover and prosecute those involved. Disrupting the illicit tobacco supply chain makes our officers’ efforts worthwhile; it stops black market tobacco making its way to the streets.