Two illegal tobacco factories and more than 14 tonnes of tobacco have been uncovered by raids in Ireland and Blackpool.

Five people from Tyrone and Down in Northern Ireland have been arrested by HM Revenue and Customs (HMRC) officers as part of a cross-border investigation into a suspected £110m tobacco fraud.

HMRC investigators, accompanied by Police Service of Northern Ireland officers, searched nine addresses in Down, Tyrone and Armagh on Tuesday 3 February. Simultaneous searches took place in the Irish Republic at Louth and Dublin by officers from Revenue’s Custom Service with police.

A tobacco processing plant, 12 tonnes of raw tobacco, two million cigarettes and £50,000 in cash were seized during the operation in Northern Ireland.

The five people were questioned by HMRC and have been released on bail. Investigations into the fraud are ongoing.

Days earlier more than 2.2 tonnes of hand-rolling tobacco, worth an estimated £397,000 in lost duty and taxes, was seized and a suspected illicit tobacco factory dismantled in Blackpool by HM Revenue and Customs (HMRC).

The tobacco was found in various stages of processing during searches of an industrial unit by Lancashire Police on Saturday 31 January. Shredding, cutting and drying machinery were also seized by HMRC during the operation. Investigations into the seizures are ongoing.

Mike Parkinson, assistant director, criminal investigation, HMRC, said: “The trade in illicit tobacco is unregulated and makes cheaper tobacco more readily available to the young and vulnerable.

“Tobacco fraud is a highly organised global crime which costs the UK £2bn a year in lost taxes. Co-operation with our partners across the UK, Ireland and overseas is essential if we are to tackle this problem effectively.

“Anyone with information on tobacco fraud can contact the Customs hotline on 0800 595000.”