Lightning raids on a multibillion-peso factory of fake cigarettes in the towns of Bugallon and Mangaldan in Pangasinan over the weekend have officials of the Department of Finance, the Bureau of Customs, and the Bureau of Internal Revenue scrambling to intensify their crackdown on clandestine cigarette factories and smugglers of machines used in its operations.
Arrested during the raids were five Chinese nationals holding tourist visas and 23 other laborers, all recruited from Mindanao, highly placed sources told Manila Standard.
Based on the warrants served by joint elements of National Bureau of Investigation in Dagupan City, BoC and BIR Excise Tax special task force headed by Sonny Advincula, the registered owners of the factory were a certain Dong Calugay and several John Does who owned the vast factory, using a piggery as a front for its business operations.
Seized were millions worth of counterfeit BIR tax stamps, bales of filters, three units of packing machines, 24 filter rods, 134 sacks of cut fillers, packs of foil, packs of cigarettes paper, and packs of tipping paper.
The mission order, signed by BIR deputy commissioner Arnel Guballa, was issued against Calugay, the man who applied for a barangay permit to operate a piggery needed for the issuance of a compliance certificate from the Department of Environment and Natural Resources.
Pangasinan PNP intelligence sources said Calugay is a former Police Officer 1 who resigned from the service last month after filing his certificate of candidacy as mayor of Sual town. He is reputedly a hatchet man and the most trusted frontman of a former governor, the same sources said.
Calugay was not in the premises when the raid was conducted in the cigarette factory located at Barangay Portic, Bugallon where 28 workers, including the five Chinese, were arrested while the clandestine factory was on full blast.
Glenn Ricarte, chief of the NBI Intellectual Property Rights Division, estimated that the factory produces about 20,000 sticks of cigarettes a day, or 1,000 packs a day. The fake cigarettes are then sold in Regions 1, 3 and Metro Manila at 30 to 35 percent cheaper than the original prices of legitimate cigarette brands.
Calugay and his backers were also not in the premises when the government agents raided the warehouse farm in Barangay Malabago, Mangaldan, where hundreds of sacks of raw tobacco leaves were stored due to the limited space in the Bugallon factory.
Advincula estimated that the factory has been in operation for several years and had cheated the government of P2 billion in taxes a year, selling some P5 billion worth of cigarettes annually.
“We were surprised when the team from NBI and BIR arrived. We had no idea at all that such illegal factory existed behind the piggery farm,” said Edilberto Orduña, chairman of Brgy. Portic.
The Bugallon factory raid was similar to another fake cigarette factory uncovered in Brgy. Unzad, Villasis, Pangasinan two years ago, where 24 Chinese nationals and more than 50 local workers, mostly from Visayas and Mindanao, were also arrested. Also seized there were millions of pesos worth of raw materials and finished packs of cigarettes with counterfeit BIR stamps.
The BIR special task force also simultaneously raided fake cigarette factories inside the San Simon Industrial Park, in Pampanga; one inside the RIS Industrial Park in Barangay Tabe, Guiguinto in February 19, 2018; and three inside the Muralla Industrial Subdivision in Barangay Iba, Meycauayan City in May 31, 2018.