Here is a story with something for everyone: Big Tobacco, Islamic terrorists (yes, I said that; sue me), Hezbollah, CAIR, the ATF, Koreans, Italians, Bloomberg, and Exxon, Glenn Beck, and the Vatican have gotta be in there somewhere.

Undercover ATF agents in Virginia have funneled more than 250 million cigarettes onto the nation’s streets in the past three years through black market sales targeting smugglers, an Associated Press review has found.

[…]

Many of those cigarettes undoubtedly wind up in the mouths of minors, since black market vendors have no reason to turn away teenage purchasers.

Despite that, government auditors and anti-tobacco groups want the ATF to do even more.

So… Our friends at the BATF are selling cigs to kids. And the anti-tobacco groups want them to crank it up. Why? Because NYC has, by far, the highest tobacco taxes in the country. So why is BATF focusing on these rings that sell in the city? Because the NYC city government is losing significant tax revenue.

The Department of Justice, the ATF’s parent agency, estimates that federal, state and local governments lose out on $5 billion annually in tax revenue from cigarettes sold through illegitimate channels.

So the feds are trying to maintain the city’s tax collections.

…Eastern District of Virginia, which includes Richmond, northern Virginia and the Interstate 95 corridor. The area is a hotbed for the crime because while 42 states and the District of Columbia have collectively passed more than 80 tax hikes on cigarettes since 2002, Virginia and North Carolina, the heart of tobacco country, still tax tobacco at only pennies per pack.

“The profit margin on this is ridiculous,” said Ashan Benedict, resident agent in charge of the bureau’s office in Falls Church, Va. “It’s not that hard to find a customer who wants to save $40 a carton.”

That’s a very interesting comment, coming from a fed. It’s profit if smugglers do it. When the city taxes it away, is it still a ridiculous profit margin?

The Virginia agents say they focus on cigarette smuggling in large part because the investigations often turn up other crimes. The ATF’s Richmond office went so far as to set up its own store in King George, Va., called KG Wholesale, which advertised in Arabic-language newspapers and elsewhere. The store was set up with audio and video surveillance to record the transactions, all of which were illegal undercover sales.

Uh-oh. Profiling. They’re setting up stings for Arabic speakers only.

The planners of the storefront sting were aware that cigarette smuggling has been a source of terrorist funding in the past – in 2002 a federal jury in North Carolina convicted two Lebanese citizens of diverting millions of dollars in cigarette smuggling proceeds to the radical Islamic group Hezbollah – and were anxious to disrupt other similar money trails.

Agent Ken Mosley is confident that investigations like the KG case disrupt terror financing, but he acknowledged evidence was insufficient to bring terrorism charges.

“There is no doubt in my mind that we have arrested people involved in terrorism,” Mosley said.

Now they dunnit.

The focus on Arabic-speaking smugglers in the KG Wholesale investigation – the store did not run ads in other foreign-language papers – smacks of profiling, said Ibrahim Hooper, a spokesman for the Council on American-Islamic Relations, a Muslim civil rights group.

“Obviously it would be a concern if they targeted only Muslims and/or Arab-Americans,” Hooper said.

Well, Dougie, you may have a point there.

The focus on Arabic-speaking smugglers in the KG Wholesale investigation – the store did not run ads in other foreign-language papers – smacks of profiling, said Ibrahim Hooper, a spokesman for the Council on American-Islamic Relations, a Muslim civil rights group.

“Obviously it would be a concern if they targeted only Muslims and/or Arab-Americans,” Hooper said.

But they aren’t the only ones involved:

Benedict and Fairfax County Police Lt. David Smith had the Korean smugglers convinced they were Italian mobsters. In the KG case, Mosley said agents would get angry or cagey if their customers asked where all the cigarettes were coming from.

And to round out the roster of unsavory characters, we have:

In fact, the cigarettes come from the same places the legitimate ones do: Big Tobacco. Under an ATF program, tobacco corporations supply cigarettes for stings and are repaid with the proceeds from the sales.

So it’s all a big conspiracy to put money in the hands of (gasp!!!!!!!) Big Tobacco at the expense of NYC taxpayers!!!!!11 But I shouldn’t be telling you about this, because you’re probably getting kickbacks, too.