• Hi Guest! DON'T FORGET TO MAIL YOUR SECRET SANTA PACKAGE BY 12/15/19.

The Letters - Update December 21, 2008

Ginseng

Banned
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UPDATE: December 21, 2008
See this post for an update of the situation including a scan of a brand new letter from OFAC. Does this signal a deprioritization of enforcement actions against the purchase of Cuban cigars? Let's keep our fingers crossed.

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UPDATE: August 5, 2008
OFAC enforcement actions continue. After an apparent hiatus, W letters are being reported again. Data continues to be sparse. Penalties are now well into the multi-thousands of dollars range as opposed to the $1k and under range of the earliest settlements.

Wilkey

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UPDATE: September 25, 2007
I have finally received definitive evidence that the premier online payment provider with which we are familiar and which has been shown to be aggressively anti-tobacco in any incarnation is turning customer transaction information over directly to OFAC. This came in the form of an R-letter from OFAC citing this provider specifically and by name as the intermediary between the buyer and the vendor (also cited by name). The exact amount of the purchase was also detailed down to the penny.

Confiscations of the original type are still occurring and R-letters are still being received. Public awareness and attention, however, seems to have waned. I would not take the recent decrease in publicly reported actions by OFAC to be an indicator that their rate of actions has decreased.

Wilkey

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FINAL UPDATE Postscript: July 18, 2007
The hammer has dropped.

Recent reports are coming to light regarding multiple seizures of packages from the Asia-Pacific region vendor who has been the prime target of the OFAC actions.

This vendor should be regarded as a permanent "no buy" option.

Wilkey

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FINAL UPDATE Late June 13, 2007
Guys,

Here is an article that appeared today on the CigarCyclopedia website. I am looking for the original article in a Los Angeles paper and will post that reference when I find it.

It is out in the open now and although there really wasn't anything reported that was not known before, I believe this public reporting puts an end to the usefulness of this thread. In a sense, we are now well and truly on our own. The only defense against receiving a letter was not to have purchased Cuban cigars in the time frame from the present extending back to at least 2002. None of us can change the past, but we can make decisions moving ahead.

Thank you to all who shared their ideas and experiences. I created this thread out of a sense of responsibility to my fellow cigar smokers and you have all reinforced for me again and again that that dedication is well deserved.

Carry on, play it safe, and never stop lighting up...your favorite Nicaraguan, Dominican, Honduran, etc...

Very best,
Wilkey

THOSE CUBAN CIGARS ARE GETTING EXPENSIVE

Los Angeles, June 13 – The government office responsible for monitoring violations of the U.S. trade embargo against Cuba has U.S. cigar smokers in its sights.

The Office of Foreign Assets Control (OFAC), a department of the U.S. Treasury, has handed out seven penalties so far this year with fines totaling $13,712.75 to Americans who “purchased Cuban-origin cigars offered for sale on the Internet.”

That’s a high level of enforcement compared to past years. For example, in all of 2006, OFAC handed out only two such penalties, and late in the year, with fines totaling $2,189. Most of the penalties issued by OFAC to individuals prior to the fourth quarter of last year were for unauthorized travel to Cuba or the sale of goods or services by companies without an OFAC license to do so.

In the cigar cases handed down so far this year, penalties ranged from a low of $820 to a high of $6,088.85 for violations ranging from a single case to multiple instances:

• April: a fine of $820.00 for an individual who bought Cuban cigars on the Internet in 2005.

• April: a fine of $1,071.90 for an individual who bought cigars in 2004 and 2005.

• May: a fine of $6,088.85 for an individual who bought cigars from 2003-06.

• May: a fine of $1,261.00 for an individual who bought cigars in 2006.

• June: a fine of $856.00 for an individual who bought cigars in 2002-03.

• June: a fine of $1,311.00 for an individual who bought cigars in 2004.

• June: a fine of $2,304.00 for an individual who bought cigars in 2005-06.

It’s worth noticing that as OFAC acquires records of transactions going back as far as five years, it is imposing fines, no doubt based on the number and size of the violations. In addition, OFAC has sent letters to smokers with U.S. addresses who are suspected of being customers of Internet sites which ship Havana cigars into the United States. So while the practice continues, the U.S. Government has increased its vigilance of the Cuban cigar trade into the U.S.

In case you had any doubts, the language of the current Cuban cigar regulations, issued in September 2004, read:

“There is now an across the board ban on the importation into the United States of Cuban-origin cigars and other Cuban-origin tobacco products, as well as most other products of Cuban origin. This prohibition extends to such products acquired in Cuba, irrespective of whether a traveler is licensed by OFAC to engage in Cuba travel-related transactions, and to such products acquired in third countries by any U.S. traveler, including purchases at duty free shops. Importation of these Cuban goods is prohibited whether the goods are purchased directly by the importer or given to the importer as a gift. Similarly, the import ban extends to Cuban-origin tobacco products offered for sale over the Internet or through the catalog mail purchases.”

Is OFAC seriously impeding the flow of Cuban cigars into the U.S. with these penalties? Probably not. But forewarned is forearmed: OFAC is watching you.

The original opening post of this thread is preserved below.

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Guys,

This is the thread that I promised to start in a post in this thread.

In that same thread, Rod has given us the go ahead to have a discussion on this topic as long as it is focused. Here is Rod's post quoted in its entirety. This is not the place to debate whether or not this topic should be discussed. I'd respectfully ask that comments on that issue be raised in the original thread linked above in order to keep this thread on topic as much as possible.

I've put a lot of thought into this, and I have decided to allow an open discussion thread dedicated to the legality of purchasing Cuban cigars. There is absolutely nothing wrong with allowing civil discussion about US Law and the ramifications of purchasing contraband. The thread may be referenced for educational purposes only.

We have had, and still have, a rule in place which prohibits the sale of Cuban cigars in the the trading forum. As long as there is an embargo, we will continue to enforce this rule. CigarPass does not promote any illegal activity. The discussion of Custom's letters, US Law, etc is legal, and will be allowed in one thread.

If someone chooses to post a letter they personally received, then so be it. Custom's is already aware of that person's illegal activity, since they sent them the letter, there is nothing to hide. I would suggest blacking out any personal information if you do decide to post such material.

Again, this thread is for EDUCATIONAL PURPOSES ONLY. We are not a place to help you break the law, or help you acquire illegal merchandise. There are a lot of people out there who are 1.) Curious about the letters, and want to learn more about the current situation. 2.) Have received letters from Custom's and are seeking help on how to respond.

Bottom line: Buying Cuban Cigars is illegal, and WE ADVISE YOU DO NOT DO THIS.

As long as it is done all in one thread, then I see nothing wrong with it.
Pursuant to Rod's stated position, I've drafted the following guidelines for discussion in this thread. These are intended to allow free discussion within the boundaries but prevent the bringing up of political, ideological, or personal issues that do not address the specific issues of interest.

1. No discussion of sources by name.
Mentioning world regions (i.e. Europe, Asia-Pacific, South America) is allowed.

2. No discussion on the politics of the U.S. Embargo or Helms-Burton.
Historical dates and elements of statute may be cited as matters of fact but no further commentary with political or ideological intent is allowed.

3. Nothing posted here should be considered legal advice.
Legal guidance reported by others may be paraphrased here but should not be considered pertinent to anyone other than the person to whom the guidance was given.

4. Do not ask how to circumvent U.S. statute. Do not ask how to avoid civilian or criminal penalties.
Situations may be discussed in the hypothetical regarding responses made and actions that have been taken. However, in no cases will a clear intent to break the law be tolerated.

I ask that anyone who wishes to participate in this thread abide by the above guidelines. We have been given an opportunity and a very short leash on which to exercise that opportunity. If any individuals choose to abuse the trust that Rod has placed in the members of this community, then I reserve the right to ask that this thread be locked. Please DO NOT take away this chance for the members of CigarPass to discuss what others in the greater online cigar community already are exploring.

Wilkey

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UPDATE Early June 13, 2007
Things have taken a turn for the worse.

1. Settlement amounts are going up.
2. Timeframe of alleged purchases now stretches from October 2002 through August 2006
3. Prepenalty Notices are itemizing the exact identity of the merchandise purchased.

See post #166 in this thread for more details.

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UPDATE April 23, 2007
I will be back shortly with some important information regarding the driving force and the parameters behind this recent OFAC push on Cuban cigars enforcement. The information is coming from the inside and as soon as I am able to confirm the accuracy of my reporting of this information, I'll release it. I believe you guys will find it illuminating.

***********************************************

UPDATE February 26, 2007
My source made a mistake and in so doing, gave me erroneous information. Here are portions of our communications.

source said:
I received the warning letter after using XXX vendor and their XXX payment processing option using XXX major credit card
to which I responded:
Ginseng said:
When was this purchase made? What was the approximate dollar value? I'm guessing under $500. Was this purchase made between March 2004 and August 2005?
and received this in return:
source said:
Within the last month... under $500
I subsequently received communications from the vendor in question. He raised some relevant points regarding the new payment gateway and the timing of the letter and in fact at least one member contacted me with questions about this as well. I passed on to my source what was given to me by the vendor and finally received this:

source said:
Oh hell, my mistake. I dug out the letter..it was dated 1/31/07 referring to a purchase 12/24/04. Since I picked up the package from XXX vendor and the certified letter at the same time @ the post office... I put the 2 together and mis-read the dates (year)of purchase.
So, the bottom line is as follows:

1. The period of interest as far as the OFAC investigation has not changed and remains early 2004 to late 2005.

2. I am aware of no reports of letters being received for purchases made in 2006 or 2007.

3. I am aware of no reports of letters being received in response to purchases made through any of the recently established payment processing gateways.

4. Nobody has any plausible explanation of OFAC's motivation for this specific investigation. We simply do not know what the triggers for this sweep are although the rules and laws are documented and clear. In other words, no one knows why now and why only this time frame of interest.

I deeply regret that I presented inaccurate information to the community. In my haste to inform others of what I perceived as a new and imminent threat, I checked but did not double check my information. And for that I apologize to the community members as well as the vendor. I will continue to maintain that my primary responsibility is to obtain, analyze, and disclose relevant information to my fellow cigar smokers but from this point onward, I will maintain open communications with the vendor as well.

As to whether this or any vendor should be placed on "no-buy" lists, I leave that to your individual discretion and risk tolerance level.

Wilkey


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UPDATE February 25, 2007 - RESCINDED and RETRACTED
Late Breaking News - I just received a first hand report of a W-Letter being received for a purchase under $500 made within the last month to one of the targeted Hong Kong-based vendors. There are two truly troubling aspects to this notification.

1. The purchase was recent, thus negating the prior assumption that the only period of interest was early 2004 to late 2005. Clearly, the attention this vendor is receiving is ongoing and intensive.

2. This purchase was made using the second, newly established payment gateway. This means that all known payment options are at risk. Further, the evidence now strongly suggests that the two major credit card providers (of cards in traditional or pre-paid format) are implicated in the turning over of purchase and account information to OFAC.

Based on this most recent disclosure, I'm motivated to publically voice my position on this vendor. This is the position I've been offering in response to private inquiries. This vendor should be placed on the "No-Buy" list until further notice. Furthermore, I would place all vendors from the Hong Kong region on the "No-Buy" list.

Another prominent forum has recently expressed the intent to throttle down the "look what Cuban cigars I just bought" threads in response to this climate of scrutiny. Prior to these events, this forum was well known for this type of public disclosure and some would say flouting of the law. Now it appears that the situation has become sufficiently worrisome for them to change something fundamental to their culture.

Folks, these are dangerous times. Be safe.

Wilkey
 

Ginseng

Banned
Ok, let's get things started.

Whereas in the past, there was only the "Confiscation Letter" (C-letter), today there are three letters that might be sent to an individual who has purchased goods of Cuban origin (including but not limited to cigars). The C-letter was routinely ignored and if any sanctions resulted from ignoring the letter, I am not aware of it.

The first of the new letters and second letter overall is the "Warning Letter" (W-letter). This letter is written in much stronger language than the C-letter and need not be directly associated with a confiscation. It informs the recipient that specific monetary transactions involving contraband goods was reported to the Office of Foreign Assets Control (OFAC) by the Bureau of Immigration and Customs Enforcement.

The second of the new letters and third letter overall is the "Request to Furnish Letter" (R-letter) and has been referred to as the "bad" letter. This is the letter that strikes fear into the hearts of those who have violated the embargo. Believe me when I say that if you were to receive one of these, you would shit a brick. In this letter also from OFAC, the recipient is informed of specific monetary transactions AND requested and required to furnish information relating to these transactions including financial documents.

I have the texts of all three letters as provided to me, first hand, by recipients and will be back to post their contents.

In a nutshell, the R-letter is the one document that is causing the most consternation. This is not just because it contains specific details of dates, transaction amounts, and dealer information. It is not just because it contains a request for invoices, receipts, and payment methods. It is all of these coupled with the thread of threat of civil penalities of up to $65,000 per violation simply for failure to respond to the request for information in the timeframe given.

Wilkey
 

Gonz

Ultra Runner
I'll add in the few tidbits of info that I am aware of, mostly gleaned from threads at another forum. I cannot vouch for the accuracy of this info, I am merely providing it to help further discussion.

Regarding the "R-letter", the majority opinion that I have seen is that this is similar to a phishing scam. Now, by no means is it a scam. The letters are indeed from the OFAC, however most folks think they are trying to scare people into handing over self-incriminating evidence. They don't believe the OFAC has any more information than dates and amounts of purchases, so as far as they know people could have been purchasing humidors or lighters or other non-contraband goods. However the previous sentence is only an idea, not a suggestion that if you receive this letter you should lie to the feds. Then you are really in trouble.

Some folks believe these letters appear to be referencing two particular vendors, both of which are in a specific region of the world. They believe that the government has either gotten a hold of credit card records from the credit card companies in the US, or they have gotten a hold of the records in limited capacity from the actual vendor. I know one vendor in that region, who I have not confirmed may be involved, has issued a statement regarding these accusations saying they never have, and never would turn over any information to US authorities since they are a company based in another country and don't have to play by our rules.

Finally, the most bizarre thing I've read is that this all has to do with the Patriot Act and anti-terrorism measures, and the embargo is the specific tool that the OFAC is using. They are trying to track down $$ that has been transacted over to a specific vendor, and what it was for. Perhaps (and I'm just guessing here) they are trying to ascertain that funds transferred to this company actually were for cigars (although illegal in itself), and not for something else much worse.

Keep in mind all of the above is what I've read and "heard" regarding this, and none of it should be taken as fact without confirmation by other parties.

I have a couple other tidbits that I'll pm to Wilkey and let him decide if they are worth posting.
 

Ginseng

Banned
Here's some more.

Thus far, the recent R and W letters that have gone out seem to be focused on transactions that took place from sometime in 2004 through late 2005.

The majority of transactions involve two specific retailers in the Asia Pacific region. So far, only one instance of a non-AP retailer has been reported. The world region of this retailer has not been revealed.

The nature of the details provided in the R and W letters and communications with affected individuals indicate that, at least initially, either of two third party or intermediary payment processing services were the likely source of this information. Thus far, there is no direct evidence that any retailer provided any information willingly or unwillingly to investigators. More recent inquiry suggests that at least one and possibly two of the major credit cards may have aided in investigations.

The key point to realize is that if an individual made transactions in the 2004-2005 time frame, then it is likely that that individual's name is already on a list within Customs or OFAC. It may only be a matter of time before either the W or R letter ends up at your door, certified, addressed from the Department of the Treasury.

BTW, I try to only report information that was communicated to me directly or posted in open forum by the affected individual. Everything is considered less trustworthy and believe me, there is a lot of innuendo and speculation out there on this subject.

Wilkey
 

cuppajack

New Member
I am really glad that this thread has been made possible, this is great information. Thanks for putting it together Wilkey (and Gonz!)
 

Ginseng

Banned
Representative C-Letter, Confiscation

This is to officially notify you that Customs and Border Protection seized XXX Cuban cigars, at the XXX International Mail Facility on XXXX, XX 200X, in case number XXXX-XXXX-XXXXXX-XX. The items were seized and are subject to forfeiture under the provisions of Title 19, United States Code, Section 1595a©, for violation of Title 31, Code of Federal Regulations, Section 515.204, and Title 50, United States Code, App5. These sections of law prohibit the importation of products of Cuban origin.

This notice also serves as an official notification that administrative forfeiture proceedings shall be instituted against the merchandise. The Customs and Border Protection will publish the merchandise by posting a notice of “Seizure and Intent to Forfeit” at the office of XXXX for three successive weeks commencing on or about XXX, XX, 200X.

Under the provisions of Title 19, United States Code 1618, and section 171.12(b) of the Customs Regulations (19CFR 171.12(b)), you may petition for relief from the above liability within 30 days from the date of this letter. The petition need not be in any specific form, but it should include all facts, which you believe warrant relief from forfeiture. All petitions should be filed in duplicate and forwarded to the address shown above, attention FP&F. All correspondence must include your case number.

The enclosed Notice of Seizure and Intent to Forfeit Information for Claimants AF-Post Form explains your options with regard to remission of the forfeiture. If you choose to petition for relief from forfeiture, you must provide an express agreement to defer the judicial or administrative forfeiture proceedings until completion of the administrative process. Include this document along with your petition.

If you choose to abandon the item, no action or response from you is requires and the item will be forfeited to the U.S. Government. Please direct all correspondence and include the case number identified on the top of this notice, to the following address:

Customs and Border Protection,
the rest of the local office address
 

Ginseng

Banned
Representative W-Letter, Warning

This is to inform you that the Bureau of Immigration and Customs Enforcement has informed us that on XXX, 2004, & XXX, 2005 you had $XXX.XX worth of Cuban cigars shipped to you from a company based out of XXX. These Cuban cigars were imported into the United States without a license from this office.

The Office of Foreign Assets Control (OFAC) administers a comprehensive embargo against Cuba as set forth in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (the Regulations), issued under the authority of the Trading with the Enemy Act, 50 U.S.C. App. 1-44 (TWEA), and the Cuban Democracy Act of 1992, 22 U.S.C. 6001-10 (CDA). The Regulations prohibit virtually all direct or indirect commercial, financial, trade, or travel related transactions with Cuba by any person subject to the jurisdiction of the United States, except as authorized by the Secretary of the Treasury or excepted by statute.

Section 515.201 (b) of the Regulations prohibits persons subject to U.S. jurisdiction from engaging in transactions involving property in which Cuba or a Cuban national has an interest of any nature whatsoever, direct or indirect, unless exempt or authorized by OFAC. Included in this prohibition is the importation of Cuban originated goods (including cigars and related items) into the United States. Section 515.204 prohibits persons subject to the jurisdiction of the United States from purchasing, transporting, importing or otherwise dealing in or engaging in any transaction with respect to any merchandise (including cigars) outside of the United States if such merchandise is of Cuban origin.

You are hereby warned that any future transaction on your part involving a violation of the Cuba embargo may result in the imposition of criminal and/or civil penalties. Criminal penalties for violation of the Regulations range up to 10 years in prison, and $1 million in corporate and $250,000 in individual fines. OFAC may impose civil penalties at $65,000 per violation. A copy of OFAC's Cuban Cigar Update is enclosed for your information.
 

bilder

Active Member
Thanks for starting this thread. I have been curious about what is done when contraband is found at the border.



Are there any cases that you guys know of where actual arrest and/or fines have been imposed? Or is the contraband merely confiscated and the no no letters sent?
 

Ginseng

Banned
Representative R-Letter, Request to Furnish Information

The United States Treasury Department's Office of Foreign Assets Control ("OFAC") administers a comprehensive trade embargo and assets freeze against Cuba as promulgated in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (the "Regulations"), issued pursuant to the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq. ("TWEA") and the Cuban Democracy Act of 1992, 22 U.S.C. 6001-10 ("CDA"). The Regulations prohibit virtually all direct or indirect commercial, financial, or trade transactions of any nature with Cuba by any person subject to the jurisdiction of the United States, except as authorized by the Secretary of the Treasury or exempted by statute. Section 515.201(b) of the Regulations prohibits persons subject to United States jurisdiction from engaging in transactions involving property in which Cuba or a Cuban national has an interest of any nature whatsoever, direct or indirect, unless exempt or authorized by OFAC. Included in this prohibition is the importation of Cuban origin goods (including cigars) into the U.S.

Section 515.204 prohibits persons subject to the jurisdiction of the U.S. from purchasing, transporting, importing or otherwise dealing in or engaging in any transacting with respect to any merchandise (including cigars) outside the U.S. if such merchandise is of Cuban origin.

Attached for your information is a Cuban cigar update published by this office which explains the embargo as it pertains to Cuban cigars.

It has come to our attention that on [number] occasions between January 31, 2004 and October 1, 2005, you purchased Cuban Cigars from XXX, located in XXX.

Pursuant to the authorities granted in section 5(b) of TWEA and section 501.602 of the Reporting and Procedures Regulations, 31, C.F.R. Part 501, you are herby required to furnish OFAC with a written report detailing a complete history of your involvement in the purchase, production, importation and sale of Cuban origin cigars.

Your report must include the following information at a minimum:

1. The dates, quantity, and value of Cuban cigars or tobacco purchased by you. Indicate the method of payment. (If another party purchased Cuban cigars or tobacco on your behalf, identify that party.)

2. Copies of all transactional documents, such as: invoices, bills of sale, receipts or other documents pertaining to the purchase of Cuban cigars or tobacco.

3. If you purchased Cuban cigars or tobacco outside the U.S., explain the method by which you imported the cigars into the U.S.

4. Any additional information related to the purchase, production, or sale of cigars by you that is relevant to this matter.

Your report is due at OFAC not later than 20 business days from date of receipt of this letter. It should be sent to [_____________] at the following address:

Department of the Treasury
Office of Foreign Assets Control
1500 Pennsylvania Avenue N.W. (Annex)
Washington DC 20220

Criminal penalties for violation of the Regulations range up to 10 years in prison and $1 million in corporate and $250,000 in individual fines. Civil penalties of up to $65,000 per violation may be imposed administratively by OFAC.

You should also be aware that failure to respond to this letter may result in the imposition of civil penalties. If you have any questions, call Mr. [________] at (202) xxx-xxxx
 

bilder

Active Member
Do you mean what happens if a mail or courier package is intercepted at a port of entry? In that case, the goods are confiscated and sometimes the empty package is sent on ahead with the C-letter inside. Sometimes the C-letter comes separately.

Wilkey


Yeah, that is what I was wondering. I hear of guys getting the letters, but have not heard of a case of somone getting hit with a fine or jail time. Was just curious if they came after Joe American that way or if they saved the heavy penalties for businesses and let poor Joe cry over the money spent on stuff he will never see.
 

Ginseng

Banned
Tim,

I've responded to your PM. If it's agreeable to you, please hold that thought until a little later in the life of this thread.

Wilkey
 

jeht2000

bodybuilder for life
From what i know, if your amount is small then you have nothing to worry about.They will just send you a letter and let you go about your business(but not always). Now, when you try to get in larger amounts then, your in trouble.
 

Smok'em

Member
Thus far, the recent R and W letters that have gone out seem to be focused on transactions that took place from sometime in 2004 through late 2005.

Wilkey
Great job!

Just a verification on timing. I had read that the focus was on transactions from late 2004 to EARLY 2005, but I guess you have seen requests for later transactions? Thanks!
 

Ginseng

Banned
Jeht2000,
There is not enough information that's been made public to determine if there is any pattern or trigger amount that leads to one getting the W-letter versus the R-letter or any letter at all.

This is one of the fundamental questions that has folks wondering. How many transactions or what dollar amount triggers a letter and which letter? At this point, there is evidence that the dollar values are approximate suggesting trigger amounts but as yet, there is no data to support that conjecture.

I have seen R-letters that identify as few as two and as many as eight transactions during the time period stated in the letter.

Smok'em,
I have seen one letter that identifies transactions as late as October of 2005.

Wilkey
 

DePasta

Stop it! That tickles!
Is it fair to ask if any of the vendors involved are site sponsors? If not please ignore this post.

-D
 
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