AP Reports: Elf Bar Seller Did Not Pay Taxes and Import Fees

Last week, U.S. authorities publicly announced the first seizure of Elf Bar products and other disposable e-cigarette brands, which is part of the 1.4 million illegal flavored e-cigarettes confiscated from China.

Officials estimate the value of these items to be around $18 million.

However, the Associated Press also reported that companies like Shenzhen iMiracle, which manufactures Elf Bar and other disposable brands, have imported products worth hundreds of millions of dollars into the U.S. while repeatedly evading customs, taxes, and import fees, as confirmed by public records and court documents.

Records show that disposable e-cigarette manufacturers often mislabel their goods as "battery chargers," "flashlights," and other items, hindering efforts to stop products that contribute to the youth vaping epidemic in the U.S.

Former FDA official Eric Lindblom stated, "The regulatory steps for disposable e-cigarettes are very weak, which exacerbates the problem."

Elf Bar is a primary product of Shenzhen iMiracle, a private company based in Shenzhen, which is a massive manufacturing hub producing over 95% of the world's e-cigarettes. According to industry analysis firm ECigIntelligence, Elf Bar, Lost Mary, and several other brands from iMiracle are expected to generate $3.5 billion to $4 billion in sales globally this year.

In the U.S., iMiracle recently abandoned the Elf Bar name due to trademark disputes and regulatory attempts to seize its imported products. Instead, its products are sold under the EB Create brand.

During a court hearing in 2022, a U.S. distributor described a surge in sales.

Jon Glauser from Demand Vape in Buffalo, New York, told federal judges that his company had sold over $132 million worth of Elf Bar products, accounting for one-third of its annual profits.

Glauser stated in court records, "We sell faster than we can stock up."

He attributed the rapid rise of Elf Bar to its high-profit margins. He said that sellers can earn about 30% profit, which is double that of other disposable e-cigarettes.

iMiracle's parent company, Heaven Gifts, previously described how it helped customers evade import fees and taxes. Heaven Gifts' website promoted "discreet" shipping methods, including not mentioning e-cigarettes or the company name on packages. Instead, the company stated that contents would be labeled as "atomizers, coils, tubes, etc."

"We also mark lower values to avoid taxes," the website stated, adding that customers could declare their own value for the goods.

In June, Heaven Gifts announced it would "go offline" shortly after the FDA instructed customs officials to begin seizing the company's goods.

Despite updates, a company spokesperson stated that Heaven Gifts is still operating, and employees continue to use email accounts with the company's name. The spokesperson did not respond to multiple follow-up questions regarding the company's business.

According to customs data compiled by global trade analysis firm ImportGenius reviewed by the Associated Press, neither Heaven Gifts nor iMiracle appeared in the data.

The seizure operation announced last week may provide some answers: the goods arrived at Los Angeles International Airport, where air carriers are not required to disclose the same detailed cargo information as sea vessels. These e-cigarettes were misidentified as toys, footwear, and other items.