The gang, masterminded by Paul Hackney from Stoke-on-Trent, set up a string of companies to steal money from HM Revenue and Customs so that they could buy high performance cars, expensive jewellery and exotic holidays at the taxpayer’s expense.

Adrian Farley, Assistant Director of Criminal Investigation for HM Revenue and Customs (HMRC), said: “They thought their plan would go undetected because they had created such a complex paper trail – but they were wrong.

“We will unravel even the most complex cases of fraud and bring those responsible before the courts so justice can be served.”

The group fabricated transactions and sales of construction equipment.

They produced fake invoices and paperwork to try and make their companies look like legitimate traders to reclaim VAT on sales and exports. They did not pay any VAT because the ‘goods’ didn’t exist.

The defendants – three women and 14 men from Staffordshire, the North West and Essex – were arrested by HMRC officers between February 2010 and November 2010 after an extensive investigation into their criminal activities.

During the investigation, searches were carried out at residential and business properties in Staffordshire, Cheshire, Manchester and Suffolk.

Officers seized bank accounts and computers along with cash, CS spray and an imitation firearm.