It was a thug’s bazaar.
The state set up a sting to snare black-market cigarette dealers — and wound up attracting smugglers with side businesses in prostitution, gun-running and drug dealing, a source said yesterday.
Undercover agents peddling illegal smokes from a Yonkers warehouse even met their neighbor — a white-supremacist lunatic suspected of running an arms factory who was so taken in by his new “friends” that he gave them a homemade bomb as a gift.
“These were some pretty unsavory guys,” the source said.
Agents this week finally swooped in on 22 people, arresting many as they turned up to buy cartons of untaxed Marlboros and Newports that they planned to resell, mainly to owners of New York City delis, the source said. More arrests were expected.
Westchester District Attorney Janet DiFiore said yesterday the smugglers paid nearly $17 million for 400,000 cartons of cigs during the yearlong operation and cost the state more than $21 million in sales taxes.
Agents from the state Department of Taxation set up their smoke shop in Yonkers, but their business — publicized by underworld informants — became so popular that they were forced to move to a much bigger warehouse in Pennsylvania.
The black-market store brought in between $100,000 and $1 million a day, said the source.
The customers, most of whom traveled from New York City, bought cartons of smokes for $42, and sold them for more than double that.
“A lot of these guys came to us with drugs, prostitutes, guns, looking to make deals,” said the source. “Some of them tried to rip us off with counterfeit money.
“One guy wanted our undercover to help him get sex slaves into the US from the Caribbean. He said he had 12 girls.”
Many of the customers were armed, and some came with guards, said the source. Some made their deals, then hung around outside to rob other smugglers.
Eight of the customers are believed to be on the FBI’s terror watch list.
“Most of the people buying assumed that the cigarettes came from Indian reservations in Oklahoma or in other states in the South,” the source said.
“But they really didn’t care where they were from and, in that environment, nobody asks any questions.”
Cigarettes sold legally in New York City must be stamped to show taxes have been paid.
The alleged bomb-maker, Gary Burstell, 53, from Cortlandt Manor, Westchester, was also arrested with a huge arsenal of weapons.