In 1986, he purchased the fifth-largest cigarette manufacturer in the United States, the Liggett Group for $140 million. In 1993, Lebow stated under sworn testimony that since cigarettes are a legal product and people choose to use them, whether or not that they cause cancer is irrelevant. In 1996, while under his leadership, Liggett Group broke ranks with the rest of the US tobacco industry, including Philip Morris, Brown and Williamson, RJR Nabisco, Loews and Lorillard, when he announced that Liggett would settle the Medicaid tobacco suits brought by forty state attorneys general. Liggett had previously been accused of being illegally influenced by Philip Morris which allegedly paid some of Liggett's legal bills in order to buy its cooperation in anti-tobacco lawsuits. LeBow stated that the reason for the settlement was to obtain immunity for Liggett from future liabilities and to prevent a future bankruptcy. The settlement entailed that Liggett agree to pay $1 million in damages; publicly announce that smoking is addictive and causes cancer; turn over long-secret tobacco industry documents; disclose ingredients in its cigarettes; and testify against the industry. Liggett was the first cigarette company to voluntarily put the label "Nicotine is Addictive" on their product.