Customs officials said smuggling groups came up with the novel way of evading detection after a clampdown on stores selling illicit cigarettes. Fliers sent to residents in Hong Kong's numerous public housing estates advertised the cut rate smokes for order by telephone, with delivery in one to two days.
One flier advertised cartons of Marlboro cigarettes at HK$200-HK$240 ($26-$31) per carton—or less than half the typical retail price in Hong Kong.
Wan Hing-chuen, a divisional commander at the Hong Kong Customs and Excise Department, said the crackdown on the stores had forced smugglers to change their "mode of delivery."
"It's very easy because in Hong Kong there are so many public housing estates, they just employ a few persons to deliver the leaflets," said Wan, adding that the smugglers rented warehouses or apartments to use as distribution centers.
The arrests and seizures in 96 separate cases were carried out from April to October, Wan said. Among those arrested were 61 buyers, including seven senior citizens, he said. Some 41 vehicles were also seized, including some trucks involved in involved in smuggling the cigarettes into Hong Kong from mainland China.
The seized cigarettes were worth 7.2 million Hong Kong dollars ($930,000) and were liable for unpaid duties of HK$5.2 million, Wan said.
He said that in the first 10 months of 2012, it seized 55 million illicit cigarettes worth HK$135 million ($17.4 million) and broke up 208 distribution centers.
Under Hong Kong law, people found guilty of buying or selling untaxed cigarettes face a fine of up to HK$1 million ($130,000) and up to two years in prison.