A businessman smuggled counterfeit cigarettes from China to evade mainland tax of almost $40 million, a court heard yesterday. Yeung Kam-fai, 47, an alleged mastermind of a smuggling syndicate, in July last year transported 11 containers of genuine cigarettes from the SAR to Zhuhai, where they were swapped for counterfeits, the District Court heard. The counterfeit cigarettes - bar one container - were shipped to Vietnam via Hong Kong while the genuine ones were sold on the mainland black market, prosecutor Paul Loughran said. On July 24, however, Customs and Excise Department officers found one of the containers waiting to be exported to Vietnam. Investigators then searched Yeung's office on September 1 last year and found documents relating to some of the other containers, the court heard. Yeung denies a charge of conspiracy to defraud the Customs and Excise Department between May 27 and August 31 last year. His alleged co-conspirators included Or Kwok-wai, who worked for Yeung, and Customs and Excise Department clerical assistant Hsu Kam-wing. Or was jailed for four years and three months for forgery, perverting the course of justice and conspiracy to defraud the Customs and Excise Department and Hsu was jailed for 22 months for accepting advantages. Mr Loughran said Yeung, the owner of Rainbow Company and the manager of West Champion International, instructed his staff to use other companies' licences to apply for import and export permits. It was alleged Yeung also bribed Hsu to process and amend permits. The trial continues today before Deputy Judge Li Hon-leung.