Tom Lesnak: Illicit Nicotine Market Is an International Money Laundering Issue

The latest installment of Regulate Smarter’s multi-part video series, “Smarter Regulation Now” features Tom Lesnak, a former special agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) with deep expertise infiltrating black-market smuggling rings, outlining the links between the illicit nicotine market and sophisticated criminal networks.

Watch the video here.

Lesnak warns that the scale of the illicit market cannot be understated: billions of dollars in unauthorized nicotine products are entering the United States outside the legal, regulated marketplace, creating a lucrative revenue stream for bad actors while making enforcement increasingly difficult.

Lesnak’s remarks underscore the high-stakes risks of unauthorized products flooding the U.S. market—products that have not been reviewed or authorized by the U.S. Food and Drug Administration (FDA)—and the need for enforcement combined with a streamlined, science-based authorization process.

As Lesnak explains, policymakers and must see the illicit nicotine market for what it is: a growing criminal enterprise with consequences for consumers, legitimate businesses, communities and national security.

These insights reinforce Regulate Smarter’s core message: FDA must accelerate authorizations of proven lower-risk smoke-free products for adult smokers while rigorously enforcing against the illicit market that undermines public health goals and funds criminal networks.

Watch now!

TOM LESNAK: Similar to illicit cigarettes, which I've worked literally 35 years of my career, is this is a massive funding mechanism for all these organizations we say we have a war on – whether it's the drug traffickers in Mexico whether it's the Chinese Communist Party or whether it's Hezbollah and Hamas in the Tri Border. When you sell contraband in the US you are sitting in vapes - just vapes – you're sitting on about $4 billion a year in money that when you sell contraband you can't declare that income for state revenue purposes, state taxes, or your federal income. So that money has to then be laundered in order to get it back to Yemen, to get it back to China, to get it back to the Mexican cartels. So it's not just a tobacco issue. It's an international money laundering issue of just this commodity of $4 billion dollars a year. So they set up dummy companies. They set up international businesses for the sole function of laundering money back to our enemies again. Whether it's in Yemen or China or Hamas.