TWO Russian men have been jailed for their part in a cigarette smuggling scam which cost the Exchequer more than £4m in lost duty.

Dzmitry Baranau and co-accused Vitally Vasilyev both admitted conspiracy to evade £4,051,746 of excess duty between August and October last year in what Teesside Crown Court was told was a “sophisticated operation”.

A number of consignments, containing more than 12 million cigarettes, were shipped illegally from Denmark into the port of Immingham, in Lincolnshire, and then carried by road via the A1(M) to Darlington.

They were then stored in a unit on the town’s Alliance Industrial Estate, in Dodsworth Street, and destined to be distributed north of the border, in Scotland.

However, Her Majesty’s Revenue and Customs (HMRC) were carrying out a surveillance operation and intercepted one of the lorries whose load of cigarettes had been disguised as barbecue equipment.

Baranau, 30, was described in court as a trusted foreman with an “essential” role, while 31-year-old Vasilyev acted as a warehouseman and was responsible for unloading the goods in Darlington.

They were jailed by Recorder Felicity Davies for three years, four months and 22 months respectively.

Despite the huge sums of money involved Baranau will only pay back £6,860 and Vasilyev £4,690 – compensation orders sought by the Crown and agreed by the judge.

Meanwhile, three other men who were arrested in connection with the conspiracy have yet to be charged. Hal Watson, prosecuting, said they had skipped bail and it was believed they may have now left the country.

He said: “When one looks at this case in the round there are others involved in it at a higher level.”

Mr Watson said text messages attributed to Baranau, of Grenier Apartments, London, suggested he had physical control of the operation and was responsible for issuing directions to those driving the consignments to Darlington.

A number of “dummy runs” also took place before the arrival of the first consignment in Immingham on September 11 last year, which held 6.5m cigarettes. All the cigarettes seized have now been destroyed.

Baranau was said to be living in a flat in Newcastle and earning only about £8,000-a-year as a handyman when he was approached and offered a job in “logistics”.

He felt under pressure to remain involved in the scam because of fears about the welfare of his family.

His barrister Dan Cordey said he had amassed no hidden riches and was directed by others.

Peter Makepeace, for Vasilyev, of Curzon Place, Gateshead, said his role was that of a manual labourer.

A HMRC spokeswoman said its investigations were still ongoing and it had no further comment.

About a third of all tobacco smoked in the North-East is non-UK duty paid and therefore illegal. Cigarette smuggling costs the UK taxpayer £900m in lost revenue each year.