Smugglers are the perfect interaction device to maintain activity in the police factions - but the navy has to hold back, or else there is no point rolling a police char.
If you want more police activity, you need to let smugglers know that if they come through your sandbox, they wont face the firing squad, and have a better than even chance of 'explaining the discrepancies' or 'contributing to the widows and orphans fund'.
@ OP if you see a smuggler - they ain't doing it right.