Police closing on global tobacco ring

PROSECUTORS in Germany investigating a huge cigarette smuggling ring are closing in on a group of 40 suspects, mostly Imperial Tobacco employees. The ring is linked to the company's subsidiary, Reemstma.

The development follows the biggest raid of its kind in Europe by 1,000 customs officials and armed border police in Germany last year.

After the raids, eight Reemstma employees, including Imperial director Manfred Haussler, were questioned over suspicions that they had been working with the Russian Mafia to set up front companies for smuggling millions of cigarettes. The network was said to stretch from Dover to the Russian Steppes.

None was arrested and all are believed to have denied the accusations. They were released without charge pending further inquiries.

All the Imperial Tobacco employees have been suspended on full pay while the inquiry goes on. Their legal fees are being paid by the company.

The allegations focused on 'aiding and abetting the organised smuggling of Reemstma cigarettes, money laundering, assisting a criminal association and breaching UN sanctions on the imports of goods into Iraq'.

It is understood that as part of the operation, codenamed Tarot, police uncovered a money-laundering network with links to arms dealing and prostitution.

According to Hamburg police sources, the evidence so far runs to 500 ring-back files. The problem facing the authorities is trying to crack the account codes used by those who face prosecution.

Because of the size and complexity of the information being analysed, charges are not expected to be brought for another year, according to sources in the prosecutor's office.

A spokesman for Imperial, whose brands include Regal and Superkings, said: 'We are standing by our employees and we are also fully co-operating with the authorities in Germany.'

He added that none of the company's employees had been arrested or charged and that the alleged events had occurred before Imperial's £3.6bn acquisition of Reemstma in June 2002.