When a deal sounds too good to be true, common sense says to steer clear. But not all counterfeit cigars come with obvious warning signs. Learning to differentiate a smart bargain from a ripoff is only half the battle.

By Joseph Finora

Hey Buddy, Wanna buy a Cohiba... Cheap?

From Fendi handbags to Rolex watches, counterfeits or “knock offs” are commonplace. Why should cigars be different?

“I was getting calls about once a month offering ‘yellow bands’,” says Scott Bendett of Habana Premium Cigar, a retailer in Albany, N.Y. Yellow bands is the counterfeiters’ term for fake Cohibas. “The calls have dropped because I’d never deal with them.”

Across the country at Seattle Tobacco Patch, Nadin Usmani had similar experiences. “The callers are usually from Florida. They say they have a ‘deal’ and that other retailers are buying them. We always say we’re not interested.” In addition to Cohibas, probably the most copied cigar, Usmani’s received calls for “Davidoff seconds.” What did he do? “We called the company. They told us that they do not sell seconds,” he verified.

“It (counterfeiting) is always going on and is a major industry problem,” says Harry Hunt, owner and 18-year retail veteran of Captain Hunt Tobacconist. He’s seen counterfeit cigars from Nicaragua, Dominican Republic and Honduras. Given his shop’s location in San Diego’s Seaport Village, Hunt’s also seen counterfeiting come from across the border and has never gotten used to it.

“The majority of counterfeits are the high-end cigars like OpusX, Ashton VSG, Padrón Anniversary, and the Cuban brands like Montecristo. We’ve seen several busts outside the U.S. concerning these cigars.”

Like other retailers, Hunt’s usually contacted by telephone but notes he’s witnessed counterfeits sold from the back of a van. “If the dealer is reputable he will not participate because he will hurt the industry,” says Hunt. While selling fakes may look tempting, for a retailer, it’s smart to avoid the practice. Likewise, smokers are wise to avoid retailers offering suspicious-looking cigars or otherwise high-priced smokes at bargain-basement prices.

“If a rep walks in your store and notices counterfeits or if someone notifies the manufacturer,” says Bendett. “That manufacturer will immediately cut you off.” A retailer dealing in counterfeits can also be subject to a criminal investigation, as manufacturers are routinely vigorous when it comes to tracking down and punishing cheats.

“We once received a phone call that someone was trying to sell our cigars,” recalls Michael Chiusano of Cusano Cigars. “We sent armed, private security guards to pick up the shipment. A short time later, a container shipment belonging to another manufacturer was hijacked.”

It’s not just a stateside phenomenon but with Homeland Security issues taking greater precedence, it’s hard for governments to devote reasonable manpower to get to the root of the problem. As tobacco sometimes seems as if it’s grown in every vacant patch of earth in the Caribbean, knock-offs are also commonly found in most cigar-producing countries where the locals are generally at or near the poverty level. Similar to the unlicensed vendors selling Prada handbags on the streets of American cities for $20, dealing in fake Montecristos is a low-risk and easy way to bring home extra cash. Tourists often believe they’re getting a “deal” by buying a few boxes or bundles from a street vendor who may have just walked out the cigar factory door. In some factories, torcedors can sometimes roll cigars for personal consumption, perhaps with their own tobacco, from scraps they’ve recovered or scrounging from backyard tobacco growers.

Each of the retailers here advised that the easiest way to be sure you’re getting what you want is to buy from a reputable dealer but there are other signs. If someone tells you of an otherwise expensive cigar for a very low price - that’s usually the first sign of a knock-off. Another sign - look for poor workmanship. A counterfeit will not necessarily be a disaster to smoke, many are mid-range on the quality scale. While some are smokable others are primitive, usually bearing a poorly printed band and inferior box. Sometimes fakes can be spotted on e-Bay and other Internet auction sites.

Legitimate manufacturers seek a consistency in quality, encompassing construction, appearance, ash, draw, and of course taste. They are concerned with how and where their tobacco is grown. Who’s harvesting, ageing, rolling, and even who’s selling it are important issues. The aim of each of these parts of the process is to keep customers coming back for more. Quality cigar manufacturers are dedicated to being in the business for the long term and are meticulous in every area of the process. And as with every agricultural product, each year they’re taking a risk with Mother Nature - virtually gambling that the harvest will be a good one. And then comes the business risk - making sure the product gets into customers’ hands year after year. The counterfeiter has none of these concerns. What’s worse, a smart, energetic counterfeiter can tarnish a brand that may have taken generations to build.

According to federal government statistics, Americans smoked about 5.1 billion large cigars in 2005, spending about $3.2 billion on them. Of those, about 321 million were classified as premium, made by hand as opposed to machine-made and utilizing long-leaf filler instead of the chopped version and retail for at least $1. Counterfeiting may range in the millions of dollars a year. In one 2006 Miami sting, more than $20 million in fake cigars, labels, and packaging was confiscated by law-enforcement officials.

“Counterfeit cigars erode the prestige, profitability, and reputation of the handmade, premium cigar industry,” stated Norman F. Sharp, president of the Cigar Association of America. “While there is no reliable data available on the volume of counterfeit cigars sold in the U.S., recent crackdowns have indicated that the problem is much larger than even industry insiders had estimated. It’s an alarmingly profitable business for counterfeiters.”

Considering that much of Florida’s population has long-standing ties with the traditional cigar-making countries and a great deal of trading has always taken place in the waters around the peninsula, it’s not surprising that much of the counterfeiting in cigars is centered there. While no one has exact figures on how many counterfeit cigars are produced and sold or what it costs the industry, one thing is certain, it’s widespread.

“There are tons of knock-offs in the Dominican Republic. Lots of them are sold to tourists,” says Chiusano, whose numbered boxes now feature a holographic warranty seal in addition to the Procigar insignia, certifying the producer is a member of the Association of Dominican Cigar Manufacturers, which among other things has stringent quality standards and aims to prevent the shipping of cigars that are “not of Dominican origin” and of “inferior quality.”

In the Dominican Republic, nearly 3,000 boxes of counterfeit cigars were impounded by that country’s National Tobacco Institute (Intabaco) last summer. The raids were part of a crackdown by Dominican authorities and netted 40,000 counterfeit knock-offs of Romeo y Julieta, Cohiba, Montecristo, Davidoff, Partagas, La Gloria Cubana, Macanudo, Punch, Troya, and others. The cigars were seized in shopping centers, stores, beaches and tourist plazas in Santo Domingo, Bayahibe, Higuey and Bavaro. Separately, some 7,000 boxes of cigars, most with fake Cuban-brand labels were seized and destroyed in a lot next to Intabaco’s offices. “These actions represent a hard blow for cigar forgers who have affected the image of the Dominican Republic abroad,” said Intabaco director Adalberto Rosa.

Ironically, tourists who think they can get good deals on Dominican cigars while vacationing there are usually not aware that most of the country’s makers produce their cigars in free trade zones and are not permitted to sell their cigars on the island. By law, they must be exported.

Other tourist destinations are equally troublesome.

“Here we know that the majority of Cubans cigars, about 85% of those sold in the Bahamas are fakes,” says Enrico Garzaroli, chairman and founder of Bahamas-based Graycliff Cigar Company.

“Most of the counterfeit Cohibas try to look more like the Cuban versions than the General Cigar version but they’re usually banded differently,” says Bendett. “They want the consumer to be confused.” Bendett, like others interviewed here, also noted that in addition to a very low price, counterfeits are usually of poor quality.

“Look at the construction,” urges Hunt. “Notice whether or not the ash is solid, examine the color of the smoke and the quality of the taste. Experience helps confirm the differences.”

The majority of cigars have a rounded cap made from excess wrapper leaf that is seamlessly glued to the end. It should be apparent that the wrapper leaf is skillfully rolled to the cigar tip and the smoker should be able to execute a clean cut. You may not feel so bad if you bought bad-tasting counterfeits at a cheap price but what if you paid full retail for them?

“Fake Cuban cigars are almost impossible to recognize without a trained eye,” says Garzaroli. “Sometimes they are very well made or made with water inside so they have a nice shiny wrapper, good-looking but then when you start smoking them it’s a completely different story - from plugged to super bitter, from banana leaves to crap. Notice the cigar’s construction, the fill, label and quality. The actual tobacco used is not the same quality and the wrapper is sometimes ok to match but the filler is garbage.”

Buying a box? Look at the box’s underside where a clear, clean factory code should be printed. Boxes are usually numbered as well. If there’s no code or number or these marks are fuzzy or otherwise poorly printed or the box itself appears to be of poor quality, your suspicions should be aroused. Also look for the phrases, “Hecho a mano,” or “Hecho in Nicaragua” (or whichever country of origin), or the words: “Totalmente a mano” as any good cigar maker will want to note that they’re hand made. Counterfeit cigar bands can be equally sloppy, usually featuring blurred printing and colors that do not entirely match the original.

The new technology stamped onto Cusano cigar boxes features a dot-matrix design and unique number that works like a bar code and returns sales information to the company. A box can only be scanned once and bogus boxes cannot be scanned, alerting the customer that something’s amiss.

“The types of boxes used in counterfeits are not necessarily the same as the real ones,” says Garzaroli. “A glass top on Cuban Cohiba Espledidos has never been made in Cuba. It’s hard to combat.” Graycliff uses real gold foil, not printed gold and different color boxes for different blends.

It’s also instituted internal anti-counterfeit controls.

Federal law-enforcement officials working in conjunction with Altadis U.S.A., made more than a dozen arrests involving bootlegged cigars during the first six months of 2006. Investigations are said to be focusing on higher-level organizers. In March 2005, the United States District Court in Ft. Lauderdale, Fla., awarded Altadis U.S.A. judgments totaling $3.5 million in a counterfeiting and trademark infringement lawsuit against two now inactive Florida corporations. The lawsuit involved Montecristo, Romeo y Julieta, H. Upmann, and Saint Luis Rey. Related counterfeit products including promotional and packing materials were confiscated and destroyed.

“This was another important victory for Altadis, its distributors, consumers, and the entire industry,” said Theo Folz, President and c.e.o. of Altadis U.S.A. in a statement. “Protecting brand names and trade designs and controlling high-quality standards are critical for the successful marketing of brands, particularly those that have established a loyal following.”

In New York, ten individuals were arrested as part of Operation Twister, a multi-agency, multi-state enforcement operation that netted 16 million untaxed cigars worth more than $40 million in March 2006.

“A seizure of this magnitude defies description,” said State Commissioner of Taxation and Finance Andrew S. Eristoff in a statement. “These individuals were responsible for supplying more than 2,000 retailers with untaxed, illegal product, denying New Yorkers more than $16 million in tobacco taxes, revenue that would otherwise help fund vital state healthcare programs.”

In Operation Twister, undercover agents from the Dept. of Taxation and Finance worked with New York State Police, the Brooklyn District Attorney’s office, Federal Bureau of Investigation, and Bureau of Alcohol, Tobacco, Firearms and Explosives.

Investigators set-up an elaborate sting operation in which Tax Department agents posed as bootleggers in Brooklyn to sell untaxed product brought in from Pennsylvania to wholesalers. The State of New York imposes a 37% cigar tax while Pennsylvania imposes none. The profit was to be split between the undercover agents and the wholesalers.

The Pennsylvania wholesalers who supplied the undercover agents with untaxed cigars requested that the agents procure counterfeit Pennsylvania cigarette tax stamps in order to facilitate cigarette bootlegging to their retail customers. The quantity of fraudulent tax stamps involved brought federal law enforcement agencies into the operation.

A group in Nevada was been charged with trying to market and distribute: Cohiba Caribbean’s Finest cigars. Cohiba is a General Cigar Co. trademark. The defendants were discovered after months of joint efforts by General Cigar’s field sales and a special task force retained by the company as part of an ongoing, nationwide effort to aggressively investigate, pursue and eliminate counterfeit products from the marketplace.

“This initiative is part of an assertive effort to address a pernicious problem which infringes and dilutes General Cigar’s strong and distinctive Cohiba trademark,” said Gerry Roerty, vice president and general counsel of General Cigar. “We felt it was time to take immediate legal action.”

The counterfeit cigars prominently displayed General’s Cohiba trademark and copy right down to the bold, black uppercase font. A United States Circuit Court of Appeals confirmed General’s exclusive ownership of the trademark in the United States in 2005.

While a bargain is always tempting, consider that in the end, it’s often the consumer who gets burned or take Graycliff’s Garzaroli’s advice. “Many clients say they’d rather smoke 25 cigars they know are going to be great then ten fakes and feel cheated.”