Customs have seized 1.8 million smuggled cigarettes in what is being described as the country's largest ever tobacco fraud case.

An Auckland businessman connected to the alleged fraud was arrested last week trying to flee the country and Customs investigators say more arrests are possible.

As part of the investigation codenamed Operation Whitehorn, Customs and police searched several homes in Auckland, finding cigarettes inside the properties, and five black garbage bags filled with cash estimated to be worth more than $2 million.

The Police Asset Recovery Unit has also taken control of two multi-million dollar properties, two luxury vehicles and frozen two bank accounts.

If you have more information and wish to contact Michael Morrah confidentially, you can do so by emailing michaelmorrah@mediaworks.co.nz

The investigation into the tobacco fraud started six months ago after Customs identified a company suspected of smuggling cigarettes inside shipping containers.

A recent inspection of one container linked to the company found 340,000 Chinese-branded cigarettes stashed inside 12 metal cabinets.

Customs Investigations Manager, Bruce Berry, told Newshub while it's okay to import cigarettes, smuggling them or mis-declaring them to evade taxes is illegal.

"This investigation has uncovered the largest tobacco fraud to date, with the tax evasion already estimated to be at least $1.8 million," Mr Berry said.

The arrested man was stopped at Auckland International Airport last Wednesday attempting to leave the country. He's been charged with defrauding Customs revenue.

Detective Senior Sergeant Chris Allen, who's in charge of the Northern Asset Recovery Unit, says they'll continue working with Customs to seize goods which are the proceeds of crime.



"Police will continue to work with our partners under the Criminal Proceeds Act 2009 to remove unlawfully derived assets across the spectrum of illegal profit-motivated activity," said Detective Senior Sergeant Allen.

Newshub.