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UK Border Agency officers have seized 6.4m contraband cigarettes at a transport yard in Teesside.
Agency officers and police swooped as the illegal tobacco was being unloaded from a trailer into a transit van on Saturday morning.
Three men were arrested at the scene and police said more arrests were expected as the inquiry continued.
The estimated lost revenue from taxes on the cigarettes would have totalled more than £1m.
The three arrested men were bailed pending further inquiries.
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