The Food and Drug Administration (FDA) has recently filed civil actions in federal court highlighting a crackdown on a black market that exists in plain sight.
Vapes and electronic cigarettes, part of a broader category of products called electronic nicotine delivery systems (ENDS), are staple products at local grocery stores and can even be purchased online.
According to the FDA, however, there is an influx of illicit products, often imported from China, that are marketed and sold to U.S. consumers, including young people.
Recently, the federal government has increased enforcement of unauthorized vape sales.
In May 2025, the FDA seized $33.8 million worth of e-cigarette products at a Chicago port of entry.
In September 2025, the FDA announced a joint operation with U.S. Customs and Border Protection that resulted in the seizure of $86.5 million worth of e-cigarette products at the same port, the largest such seizure to date. Additionally, the FDA has sent warning letters to hundreds of retailers and issued civil money penalty actions to over 100 more.
That’s according to a recent client alert titled – Federal Government Increases Crackdown on Illegal Sale of Vapes by Lowenstein Sandler partners Matthew M. Oliver and Matthew Wester.
“The government has filed a number of actions cracking down on the sale of illegal vapes,” Matthew Oliver told Corporate Crime Reporter in an interview last week. “In 28 years of doing this, I have never seen a product or market where the disconnect between the level of regulation and the availability of illegal products is so extreme. Typically, when something is lightly regulated, there is a lot more opportunity for abuse. But when a product is heavily regulated, it’s usually hard to find it on the market.”
“But the regulation of electronic nicotine delivery systems and other related vape products is significant, stringent. There are a lot of hoops to jump through. It’s difficult to get approval. It’s not typically granted. And at the same time, you can walk into any corner store in New York City or suburban New Jersey and buy whatever you want. And you would have very little idea whether this is something that has been approved by the government or not.”
“Judging by the scope of the seizure actions and the other actions that the government has been filing, there are hundreds of millions, if not billions of dollars in illegal vape products in this country being sold every day. The disconnect between the intensity of the regulation and the lack of enforcement or the effectiveness of enforcement is kind of shocking to me.”
How do you explain it?
“There just hasn’t been sufficient oversight or enforcement. It’s not like they are short circuiting the approval process. They are just totally avoiding it. They are somehow getting all of these products into the country and nobody seems to care that much. In fairness, the government has had a lot more important high level things on its plate for the last five or ten years. It’s not a product where there is widespread public outcry. There are legal sources available.”
You would think that given the level of that kind of problem, that the major players in this space would call for a crackdown against their illegal competitors.
“I would have to think so. What you are saying makes complete sense. It’s not the kind of thing they would be doing publicly in the press. It’s probably the kind of thing they would be handling discretely through lobbyists. They are all about market share. Their bottom line has to be significantly impacted given the volume and value of the products that the government has been seizing just over the last couple of years.”
Is your practice exclusively defense side?
“No, I do plaintiffs’ side cases all the time. We are not doing plaintiffs class action work on the plaintiffs’ side. But when we have companies or individuals in a business dispute, yes, we are as likely to represent plaintiffs as defendants. I also do quite a bit of business divorce cases.”
What is business divorce?
“Typically when owners of a company can’t get along any more and they have to break up. We just settled one last year. It was a huge well known company in the area. It was the fourth generation of family ownership. The family members had grown apart. And one side was actively running the business and the other side wasn’t. There were lots of bad feelings. When a new generation takes over, there is no longer that same level of trust and family harmony that you had in previous generations. And it doesn’t have to be families. We have cases with business partners who worked together for a long time and then it stops working. Or this person is not contributing. Many times it is driven by a liquidity event on the horizon.”
“One person says – I want to sell this thing and I don’t want to give that person half of the $40 million I’m going to get. We’ve got to find some way to do something here. The situations are factually interesting, there are family dynamics. They tend to be challenging to settle despite the obvious benefits to all parties. There is a lot of emotion and history and baggage that goes along with that.”
You also represent clients in legal malpractice cases. Are legal malpractice cases on the rise? And why would that be happening?
“They are on the rise. Relationships between lawyers and clients used to be more long standing, less transactional, more of a history of trust. If you had a result in a case that folks were not happy about, there would be more of an acceptance that this just didn’t work out, it is what it is. Now there is more of a tendency to look around and shift responsibility. Many malpractice claims are without merit. But many do have some merit. People are scrutinizing the work of lawyers more. And that has more impact as to how you practice. You can’t just assume or trust. You need to create a record of what you are doing, create a record that you are involving your client in decision making, that you are appropriately counseling them about the risk. It is part of what we have to do and how we have to practice.”
We are now in a deregulatory environment under this new administration. Corporate crime prosecutions are declining. How has that affected the practice?
“That is my sense. We just had a white collar practice group meeting last week. And this was the topic we were talking about. We have a strong practice in the Southern and Eastern Districts of New York and the District of New Jersey. Those are three of the largest and most sophisticated U.S. Attorney’s offices when it comes to corporate crime and securities fraud. The shift away from that kind of regulatory environment is felt fairly dramatically here.”
“A lot of these cases are big and take time. Maybe they started a year ago. Maybe they started five years ago. These cases can persist for a while. And sometimes the government comes in and pulls the plug on existing cases. And we have definitely seen that. But more often than not, they are not pulling the plug. They are looking to wrap something up a little bit more quickly than they otherwise might have. But we are seeing more of a lack of new investigations.”
“But often when the federal government is not being as aggressive, state Attorneys General will step in and fill that gap. We are definitely seeing an uptick of these state cases against corporate clients.”
[For the complete q/a format Interview with Matthew Oliver, see 39 Corporate Crime Reporter 40(14), October 20, 2025, print edition only.]