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Five Queens residents busted last Friday in the illegal trafficking of untaxed cigarettes allegedly evaded paying $3 million in taxes, the Nassau County District Attorney said.

Duan Jun Zhang, 38, of Elmhurst; Fei Yin, 24, of Bayside; and Flushing residents Maerong Gao, 57; Wai Ming Lui, 46; and Sauha Candy Lam, 35, were arrested July 18 and charged with evading the cigarette and tobacco product tax — a Class E felony — for buying thousands of cigarette cases from an undercover cop for half the properly taxed price, authorities said.

They face up to four years in prison if convicted.

“We caught these defendants red-handed, trafficking untaxed cigarettes and cheating taxpayers out of millions in lost revenue for health care, education, job training and other essential services,” said Nassau County District Attorney Kathleen Rice.

According to Rice, an undercover cop sold the five defendants about 1,200 cases of untaxed cigarettes worth more than $6.4 million for only $2.3 million. A majority of the sales during the year-long probe took place from a storage unit on Stewart Avenue in Garden City, Rice said.

The defendants then allegedly transported the cigarettes to residences in Queens and Brooklyn and sold them to local retailers or to buyers on the street.

The multi-agency investigation, which began last July, also resulted in the seizure of more than 100 cases of cigarettes and $958,000 in cash, Rice said.

“Cigarette smuggling to evade state and local taxes is a multimillion dollar industry. It is a highly profitable tax-free cash business for those involved in it,” Queens District Attorney Richard Brown said. “However, it cheats taxpayers who must dip into their pockets to pay higher taxes, and it cheats the government as well by fueling an underground economy which does not pay much needed state and city taxes.”

The five defendants pleaded not guilty at arraignments. They will return to court separately from August 2 to September 24.

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