Justice Planning Indictments in Tobacco Fraud Investigations

The Justice Department plans to bring the first criminal charges soon from numerous investigations involving the tobacco industry, government and defense lawyers familiar with the case said Thursday.

The sources said federal prosecutors plan to ask a grand jury in New Orleans to hand down an indictment in a case about whether Brown & Williamson employees engaged in an alleged cigarette smuggling scheme.

They said the indictment will probably be handed down by the end of next week, in what would be a new blow for the BAT Industries unit and the tobacco industry, which faces increased federal and state scrutiny and proliferating lawsuits.

Mississippi Atty. Gen. Michael Moore, who has been leading the state’s legal efforts against the industry, told lawyers at a court hearing Wednesday that the indictment in New Orleans will come next week.

Philip Morris Cos., one of the targets, said the arguments have no basis in state or federal law and vowed to fight.

In a separate development Thursday, Texas became the seventh state to file suit seeking reimbursement of smoking-related Medicaid expenses in a mounting campaign against cigarette makers.

The state that most calls to mind the hard-smoking, hard-riding Marlboro man is seeking $4 billion in damages, which far exceeds claims filed by the six other states. Florida, Mississippi, Massachusetts, West Virginia, Louisiana and Minnesota claim the companies should reimburse them for the Medicaid costs of treating illnesses linked to tobacco.