The sign said it was a prison and those inside were not allowed out. But police say the building was really something else -- a disguised factory that made counterfeit cigarettes.

Investigators who raided the factory in the western city of Meishan found 117 tons of tobacco and 565 cartons of smokes with 20 brand names, Xinhua News Agency said Tuesday.

The nameplate read "The No. 1 Block of the Xinkang Prison of Sichuan Province" -- which is the name of a real prison elsewhere in the province, Xinhua said. Inside were cigarette-making workshops and dormitories.

"Workers were treated like prisoners, as they were not allowed to go out and had to stay in the factory round the clock," the report said.

Xinhua said two people were arrested but did not say how many people worked in the factory.

China has more than 300 million smokers.

The counterfeiters are believed to cost the treasury billions of yuan a year in lost taxes.
 
(Agencies via Shenzhen Daily January 29, 2004)