Police and customs officers moved in on a petrol station in Camlough

Operation Nursery was aimed at oil smuggling and laundering, racketeering and money laundering in the border area, Irish police said in a statement on Thursday.

It was the culmination of a two-month operation by the Police Service of Northern Ireland, customs officers, gardai, the Irish Criminal Assets Bureau and the Emergency Response Unit.

Security sources told the BBC that the operation was primarily targeted at a man in his 50s who is a suspected smuggler of diesel oil and also alleged to be involved in money laundering and general racketeering.

Gardai arrested two men and a woman, and they are being questioned at Kells police station in County Meath.

A quantity of cash was found at Mountpleasant, north of Dundalk, where one of the men and the woman were arrested.

Fuel laundering is being targeted in the operation

A number of items were seized including two cars, three lorry tractor units and documents.

The operation began at about 0900 BST on Thursday.

Six premises and homes were searched by customs officers in the Newry, Belleek, Camlough, Jonesboro and Warrenpoint areas.

Another person was arrested there. Some 110,000 litres of fuel, seven vehicles and four fuel laundering plants were seized.

The diesel-laundering plants were discovered at Edenappa, near Jonesboro.

Searches were also carried out at farmhouses, land, outhouses and offices around Ballymascanlon and Dundalk in County Louth.

Underground tanks

Officers have also been checking the contents of underground tanks at some petrol stations.

PSNI Chief Superintendent Eddie Graham said: "The police and their partners in a range of agencies are determined to disrupt the illegal activities of criminals involved in fuel laundering, counterfeiting and other crimes.