Seventeen people have been sentenced for a £2.3m VAT repayment fraud involving the sale of fictitious concrete crushing machines, following an investigation by HMRC.

The gang's mastermind, Paul Hackney from Stoke-on-Trent, set up a string of companies. He then worked together with three women and 14 men from Staffordshire, the North West and Essex to fabricate transactions and sales of construction equipment.

The group 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 as the 'goods' didn't exist. The money they claimed in this way was spent on extravagant lifestyles including high performance cars, expensive jewellery and exotic holidays according to evidence heard during the trial at Manchester crown court.

Adrian Farley, HMRC assistant director of criminal investigation, 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.'