FRAUD investigators have swooped on a suspected illicit tobacco smuggling ring as an alleged transaction was taking place.

The 700kg of tobacco and cash seized from the alleged gang is part of an operation which is claimed to be worth an estimated £25m a year.

Officers from HM Revenue and Customs’s fraud investigation team looked on as the apparent handover involving £50,000 cash and the tobacco took place on Friday night.

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The operation, conducted in the Leeholme area, near Bishop Auckland, and Sunderland area resulted in the arrest of a number of individuals and the seizure of more than £63,000 in cash.

Michael Scrymgeour, of HMRC’s fraud investigation service, applied for permission at Newton Aycliffe Magistrates’ Court on Tuesday to continue its seizure of the cash.

He said: “On Friday evening there was a major intervention when a lot of cash was seized.

“It was all in connection with a suspected smuggling ring of cigarettes and tobacco with an estimated revenue of £25m.”

The HMRC representative told magistrates that part of the operation was carried out on a farm while an alleged transaction was being made.

“A sack of £50,000 was found in a van and 700kg of tobacco that had been removed from one vehicle to another,” he said.

A pair of trousers hanging in a stable block at the same farm were found to have £3,000 inside while the home of an individual involved in the suspected handover, which is shared with their partner, was searched by officers who discovered $3,000 and £700.

Meanwhile, officers searching another property found £4,000 in a handbag and £3,000 was found in another bag.

Mr Scrymgeour said all cash confiscated was suspected to be linked to an alleged smuggling ring.

At Tuesday's hearing, chairman of the bench Anita Atkinson, granted permission for HMRC to continue the detention of the seized cash for six months.

The cash seizures were from four individuals living across the Wheatley Hill, near Peterlee, Crook, and Leeholme areas of County Durham.

HMRC were unable to provide any further details on the investigation.