A fraudster who dodged VAT on thousands of cigarettes has been ordered to pay £480,000, the Crown Office said.

The Confiscation Order was made against Stephen Dunn at Hamilton Sheriff Court on Thursday.

The 45-year-old, from Bellshill, in Lanarkshire, previously admitted evading VAT on tobacco.

At Hamilton Sheriff Court on March 8 2010, Dunn also admitted an offence of concealing £51,285 of criminal property, and was sentenced to 12 months in prison.

The conviction followed on from Operation Blubber, an investigation carried out by HM Revenue and Customs in 2007.

Dunn was found to have 39,800 cigarettes and more than £400,000 cash stored in his home and his father's home.

Solicitor General, Lesley Thomson QC, said: "Stephen Dunn had £480,000 taken from him today as he was assumed to have a criminal lifestyle under the Proceeds of Crime Act 2002.

"In his case it was from criminal trading in hundreds of thousands of cigarettes. The £480,000 confiscated today includes £400,000 in cash found hidden in his house and his dad's house, and will now be reinvested by Scottish ministers for the benefit of Scottish communities through the CashBack programme. A much better use of that money than funding Stephen Dunn's personal criminal lifestyle.

"This case should be a warning to those who think that tax evasion is an easy option, and a reminder that the Proceeds of Crime Act covers a wide range of offences where there has been financial benefit."

HMRC Assistant Director of Investigation in Scotland, David Odd, added: "Tobacco smuggling is serious crime and involves criminal gangs who profit from the sale of illicit cigarettes and tobacco. This crime undermines honest traders, putting their livelihoods at risk, damaging our local economy.

"Dunn's sole aim was to line his own pockets. He enjoyed the benefits of our public services but his actions were denying them vital revenue. An estimated £2bn in revenue is drained from public finances each year through tobacco fraud alone.

"Working together with our law enforcement partners in Scotland and the Crown Office, we will ruthlessly pursue the ill-gotten gains of criminals and seek to take the profit out of crime. I am delighted that a confiscation order for £480,000 was made today at Hamilton Sheriff Court."