Operation TGIF: Feds, police raid multiple liquor stores in cross-state investigation

CHICAGO (WLS) -- U.S. Secret Service agents backed up by local police are raiding liquor stores in Northwest Indiana and metro Chicago in an apparent effort to shut down a "bootleggers' highway" that cheats Illinois out of millions of tax dollars.

Federal agents and sheriff's deputies descended on numerous stores Friday morning and were still at several locations hours later carting out case after case of alcohol products.

The raid was related to a "bootleggers' highway" out of Indiana aimed at evading Illinois' higher liquor taxes, law enforcement sources told the ABC7 I-Team. A spokesperson for the Illinois Attorney General declined to provide details and said only that there was an ongoing investigation.

Liquor stores were being raided in Highland, Indiana, and in several Chicago suburbs including Blue Island and South Chicago Heights. Customers streaming to United Liquors in Blue Island to make Friday afternoon purchases walked away disappointed after closed signs were posted on the front door and federal agents were in the store.

In 2015 the I-Team began documenting apparent rampant "special deliveries" from Northwest Indiana to metro Chicago that were costing Illinois millions of dollars in lost tax revenue. Authorities believed there were elaborate schemes to skip paying taxes on alcohol purchased from Indiana stores, products then allegedly sold for millions in cash to Illinois stores via a back door register. I-Team surveillance cameras shot liquor being loaded into trucks in Indiana and delivered to liquor stores in Illinois.

Illinois and Indiana state laws prohibit retailers from selling to other retailers under most circumstances. Such sales could also be against federal law.

In recent years liquor industry officials have been highly critical of what they saw as lax enforcement and slow-moving state regulators in both states. Friday's enforcement effort would appear to be the boldest move yet by authorities to address the bootlegger's highway.

During a Wednesday meeting, the Illinois Liquor Control Commission addressed the bootlegging issue according to attorneys familiar with the cases. State liquor control officials said they were working with the Illinois Department of Revenue's criminal investigation division and the Secret Service and that indictments were likely to be handed up in the near future.

Off-the-book liquor sales can be profitable on both sides. A six-bottle case of vodka that costs $167 in Indiana costs $226 in Illinois and is at least $18 more than that in Cook County.