HM Revenue and Customs (HMRC) officers arrested 10 suspected multi-million pound "carousel" fraudsters last week in a nationwide swoop.
It said arrests were made across the UK including in Birmingham, Slough, and Maidenhead, with 20 premises being searched in connection with a suspected missing trader intra community (MTIC), VAT or carousel fraud.
HMRC had been investigating a group of individuals, companies, and associated bank accounts for 18 months. The results of the lengthy inquiry led to coordinated dawn raids on 27 June, under the name Operation Varlet.
The operation centred on the group's suspected involvement in illegally traded mobile phones using the carousel fraud method.
It said mobile phones had been bought VAT-free from Europe for businesses in the UK, but that the VAT due to HMRC had been subsequently bypassed.
HMRC director of operations, criminal investigation, Euan Stewart said: "The level of sophistication of these frauds means that our investigations are becoming more complex, but we are committed to working with the revenue and customs prosecutions office to bring the criminals behind the frauds to justice and to recovering the money stolen from the British taxpayer.
"This crime is not victimless; it is organised and causes real harm."
Just last month, six men were jailed for a total of nearly 48 years for their involvement in a sophisticated £85m carousel fraud scam.
Sentencing followed a huge five-year HMRC investigation that involved nearly 100 mobile phone traders.
Raymond Cox from Staffordshire, Brett Issitt of Todmorden, Lancashire, Michael McNeill from Rossendale, Paul Sweeney who lived in Amsterdam, Peter Glover of Warwickshire, and Colin Jones from Cheshire were all jailed at Liverpool Crown Court on 12 June.
HMRC has had a busy few months in its attempt to clamp down on carousel fraud, which last year alone cost British taxpayers £3bn.
A new measure that hopes to help prevent the EU-wide scam of trading mobile phones and computer chips VAT-free was introduced in the UK on 1 June under the "reverse charge" scheme. ®