One of the nation's largest distributors of butane lighters and tobacco products was fined $500,000 today and had an officer sentenced to four months of confinement for sending 10,000 unmarked packages containing flammable materials by FedEx and UPS to avoid a special handling fee.
"People could have been seriously injured," U.S. District Judge Harvey Bartle 3d told Allen S. Roth, chief operating officer of Garden State Tobacco Co., of Neptune, N.J., which does business as H.J. Bailey Co.
Bartle sentenced Roth, 45, of Eatontown, to one month in prison followed by three months of house arrest and a $10,000 fine. Roth's company, which is owned by his mother, Seena Roth, was fined $500,000 and put on four years' probation.
"I certainly do 'get it,' " Roth told Bartle, "and the company does get it also."
Roth said that since he was confronted by federal agents about the illegal lighter shipments, his employees underwent additional training and he has informed his customers that "this was a serious violation and that we will be complying with all regulations."
The 72-year-old Bailey company is ranked as one of the largest U.S. distributors of Zippo-brand lighters and tobacco accessories, with annual sales of $35 million.
In May, federal prosecutors in Philadelphia charged Roth and his company with unlawful transportation of hazardous materials. Both pleaded guilty.
The charge involved about 10,000 shipments made by the company between Jan. 1, 2000, and Aug. 31, 2003, which prosecutors said were sent in unmarked packages so the company could avoid the $20-per-package fee for hazardous materials.
Federal law requires any company that transports hazardous materials to train and test employees on federal shipping rules and accident prevention, and to refresh that training every three years.
Prosecutors said that the illegal shipments did not cause any fires or injuries.
Hazardous materials, including flammable items, must be clearly labeled and carry explanations to a shipper, driver, and emergency personnel responding to an accident about safe handling and storage. Flammable goods can spontaneously ignite when stored in high temperatures.
Roth today also acknowledged that for years he had evaded taxes by skimming $1,000 a month in cash from company revenue. Roth said he has disclosed the evasion to the Internal Revenue Service and is paying back taxes and penalties.
