TWO men caught with hundreds of thousands of contraband cigarettes were warned all options, “including custody”, remain a possibility when they are sentenced next month.

It follows the seizure of 797,540 Embassy Regal cigarettes, made for the Italian market, in a concealed floor in a van at a haulage company depot, at Houghton-le-Spring, on June 26, last year.

Raymond Taylor and John Nixon, who had collected the consignment from the depot, were arrested in an operation by HM Revenue and Customs and police.

A further 90,400 contraband cigarettes, a mix of Regal, JIM and Palace brands, were then found at Taylor’s home, in Woodbine Avenue, Horden, County Durham.

It represented a potential loss of £235,000 to the Treasury, had that amount of cigarettes been legitimately sold.

Appearing at Durham Crown Court, 58-year-old Taylor admitted two counts of possessing goods on which duty had not been paid.

Nixon, 56, of West Lane, Middlesbrough, admitted a single charge.

The case was adjourned for preparation of background Probation Service reports on the pair, and a medical report on Taylor.

Judge Simon Hickey told them all options remain open when they return for sentence, “including custody”.

Both were bailed to return for the sentencing hearing, on Friday, October 7.