NSW Police have charged three people following the multi-agency investigation into the alleged operation in Sydney.
Officers searched a number of vehicles in Greystanes, Haberfield and Rosehill on Saturday, seizing boxes of illegal cigarettes and $34,500 in cash.
Two men aged 34 and 37 and a 33-year-old woman were arrested.
About 3.30pm on the same day, officers searched a home on Gregory St in Greystanes where they allegedly found 712,800 illegal cigarettes and five firearms.
Demand for illegal tobacco has exploded in Australia because of large tax increases on legal products.
The increases have pushed the price of a packet of legal cigarettes towards $50, prompting a surge in black market sales.
Illicit tobacco now comprises 50 to 60 per cent of Australia's total tobacco trade, the Illicit Tobacco and E-cigarette Commissioner estimates, steering up to $11.8 billion in excise away from federal coffers.
All three people arrested were charged with convey/possess tobacco products reckless regarding defraud revenue.
The 37-year-old man was also charged with recklessly deal with proceeds of crime more than $5000.
He appeared before the Bail Division Court on Sunday, where he was refused bail to face Parramatta Local Court on May 28.
The younger man was also refused bail at the same court and is due to appear before Burwood Local Court on May 26.
The woman was granted conditional bail to appear before Parramatta Local Court on June 24.
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