HAPPENING NOW: @Sheriff_EWright along with federal agents discuss Operation Southern Lights; massive cigarette fraud investigation. #abc11 pic.twitter.com/iwalLyeTYe — Morgan Norwood (@MorganABC11) July 22, 2019

FAYETTEVILLE, N.C. (WTVD) -- On Monday, the United States Attorney's Office released information about Operation Southern Lights -- a massive cigarette fraud investigation involving North Carolina, Virginia and New York.Thirty-one people and one business entity were involved in the cigarette trafficking and money laundering operation which made more than $12 million.Officials said the group was involved in a scheme to defraud the federal government, the states of North Carolina and New York, and the commonwealth of Virginia of millions of dollars in tax revenue from cigarettes.New York state requires cigarettes sold at the retail level to have a tax stamp on the pack showing it was charged by the proper authorities, which is regulated by federal law. However, North Carolina does not follow that law.Therefore, authorities said the suspects would buy the cigarettes in North Carolina, drive them to New York and sell them without paying the tax.State taxes in North Carolina from 2018-2019 were $4.50 per carton. In New York, the price was $43.50; however, if it was bought in New York City, addition city taxes raised the price to $58.50.Meaning, there was a cost difference in taxes alone of $54 per carton.The gross profit from the scheme was said to be more than $12 million.The group saw that cost difference and jumped at the chance to make a profit, officials said in a news conference.Authorities said the group sold, distributed, shipped and transported more than 10,000 cigarettes without paying taxes.So far, 25 have been arrested: three in Virginia, three in Florida and 19 in North Carolina.Officials said it was one of the largest multi-state crime organizations on the east coast and was based in Cumberland County, North Carolina.Homeland Security Investigations, Cumberland County Sheriff's Office, U.S. Marshals Service, Robeson County Sheriff's Office and the Johnston County Sheriff's Office took part in "Operation Southern Lights."