The ringleaders of the gang, married couple Youri Khomitch and Victoria Chambers, ran a string of companies offering accountancy services for Eastern European building workers.

They submitted over 3000 fraudulent self assessment tax returns over a four year period, for both fictitious people and individuals whose identities had been hijacked.

Khomitch, 36, and Chambers, 37, used the cash to buy a luxury home in a gated community in Kent where they fitted flat-screen TVs in every room and installed an en-suite sauna and outdoor hot tub.

They also bought a string of properties worth almost £2m across London and Kent. They enjoyed expensive holidays to Japan, Dubai, New York and Thailand. Chambers spent thousands of pounds on expensive gold and diamond jewellery and a breast enlargement operation.

The fraudster couple also sent their eldest children to a private school. When they were arrested, HMRC officers found over £130,000 in cash and £380,000 of payable orders from HMRC.

The fraudulent enterprise was started by Komitch and Vjacheslav Dostenko, a Belarussian, in 2004. They fell out in 2005 and Dostenko was joined by Roman Kuznetsov, a convicted Russian cigarette smuggler.

They set up a bogus recruitment company in Southwark and lured unsuspecting eastern European construction workers to their offices on the false promise of lucrative work.

Once there, the fraudsters took their identity documents which they then used without their knowledge to submit hundreds of false repayment returns

Some of the bogus firms were set up by Alexander Sokolovskiy, a Russian who specialised in false identities and was described in court as the “bank man”.

He set up fraudulent companies which the rest of the gang used as a cover for the fraud, and used fake identities to open the bank accounts that were used to receive the illegal rebates.

The final fraudster was Oleksandra Hawkins who acted as company secretary for two of the companies used to commit the fraud.

Peter Hollier, Assistant Director, Criminal Investigation for HMRC said: “This was an organised criminal attack on the public purse.

“This gang stole identities and exploited innocent citizens with no regard for the consequences – they were solely motivated by greed. Tax fraud is not a victimless crime – it takes money away from vital public services, and HMRC is determined to make the perpetrators of these crimes face the full force of the law.”

The gang members are currently subject of a restraint order, freezing assets of over £2 million. Confiscation proceedings are underway.