RCMP raid Imperial Tobacco offices

Police raided the Montreal offices of Imperial Tobacco Friday, hunting for documents in relation to cigarette smuggling in the late 1980s and early '90s.

The RCMP were investigating possible collusion a decade ago between Canada's biggest cigarette maker and criminal elements smuggling cigarettes, Radio-Canada reported.

• FROM NOV. 26, 2004: Perquisition surprise chez Imperial Tobacco

During that period, the government says, it lost hundreds of millions of dollars in taxes to widespread smuggling of cigarettes from across the American border.

Imperial makes three of the best-selling cigarette brands in Canada: du Maurier, Player's and Matinee.

Ottawa is already suing several tobacco companies, among them JTI-MacDonald, maker of Export A, for alleged involvement in the smuggling, in an attempt to recover some $1.4 billion in lost taxes.

• FROM FEB. 28, 2004: Tobacco firm charged in smuggling scheme

Ottawa, Ontario and Quebec allege several tobacco companies supplied the Canadian black market with Canadian-brand tobacco products earmarked for export or produced abroad.

The cigarette makers allegedly knew aboriginal middlemen operating on reserves that straddle the U.S.-Canada border such as Akwesasne were smuggling the cigarettes back into Canada, thereby avoiding taxes on the resale of the smokes.

Spokesman Yves Thomas Dorval said Imperial had not expected to be raided. "We're surprised because during the period in question we co-operated wholeheartedly with the RCMP ," Dorval said.

"Imperial Tobacco Canada will be co-operating to the fullest extent with the RCMP to provide them with the documents they are seeking, even if on a legal standpoint it is not 'consenting' to the search," the company said later.

The RCMP had a three-day search warrant, Radio-Canada said, and was expected to remain on site at Imperial's offices, scrutinizing documents all weekend.

Imperial is not a quoted company as it is wholly owned by London-based British American Tobaccco.