The money went up in smoke.

The feds say the owner of a Manhattan contracting firm withheld “well over” $1 million in payroll taxes from his workers and used it to fund a lavish lifestyle — including more than $67,000 worth of cigars.

Thomas Nastasi III, of Mount Kisco, ran the scam between 2001 and 2007, while breaking repeated promises to make the payments, Manhattan federal prosecutors said yesterday.