A CRIMINAL gang centred in the North-East avoided paying almost £1m of tax with a massive smuggling scam, a court heard yesterday.

The international conspiracy stood to gain £950,000 in evaded duty on six million cigarettes. The haul was in two lorry loads destined to be sold in pubs, clubs, and shops from Tyneside to South Yorkshire.

Containers that were supposed to be carrying loads of olives, steel and yarn provided cover for the year-long operation.

Customs officers believe 13 lorry loads of cigarettes got through before the gang was caught, Hull Crown Court heard.

An undercover surveillance operation led to raids and arrests in Howden, South Yorkshire, Tyneside and London, in May last year.

Five men have pleaded guilty to a single charge of conspiracy to evade the tobacco duty.

They are David Kelly, 32, of Glenmeads, Nettlesworth, Chester-le-Street, County Durham; William Farrell, 57, of Turbina Gardens, Newcastle; Ian Wright, 31, of Conyers, Nettlesworth; Lawrence Hood, 41, of Glenroy Gardens, Chester-le-Street, and Dennis Neal, 58, of Bolton-on-Dearne, Barnsley.

The court heard that officers in Doncaster recovered £258,000 in cash from the boot of an Audi car - money to be paid to a Greek supplier.

Further arrests led to the recovery of a money-counting machine and paperwork relating to other consignments.

The gang used contacts in Estonia, Belgium and Holland to move containers of cut-price cigarettes, ship them to the UK via Hull docks and break down the loads.

Geoffrey Maroon, prosecuting, said: "This is not a victimless crime. It deprived the public purse of revenue that could be put to public use in schools and hospitals."

The Customs investigation led officers to a Greek money courier, Dragon Arsenovich, 43, of Thorpington, Cambridge, and a Belgian courier, Jeno Grosz, 52, of London, who have both been charged with being part of the conspiracy but failed to appear for their trial. International warrants have been issued for their arrests.

An eighth man, haulier George Clark, 52, of Belby Lodge, Howden, South Yorkshire, has gone on trial, denying any part in the criminal conspiracy.

His case, which is expected to last a week, continues.

The men who have pleaded guilty are due to be sentenced after the completion of probation reports.