Wine smugglers that used 'crafty code words' and Skype messaging to coordinate their illicit dealings have been jailed for £5m excise duty and VAT evasion, after an investigation by HMRC.

Roberto Parma, 54, was sentenced to six years and seven months imprisonment. Alberto Mori, 53, was sentenced to seven years.

Parma, owner of I Nobili UK Ltd, imported wine to the UK from an Italian-based company, Cantine Soldo spa, using the UK's duty suspension scheme. Parma and Mori exploited this scheme by using the same delivery documents many times and avoiding paying duty by diverting the wine from the bonded warehouse, when duty would normally be paid.

Mori, owner of Soldo UK Ltd, a London wine merchant, worked with Parma to sell the imported wine illegally through a network of wholesalers around the UK.

HMRC investigators found that Parma's company provided cover for the fraud. It used Skype messaging to orchestrate the movement of wine from Italian warehouses and gave code words to drivers to use when picking up the loads, to avoid paperwork landing in official hands.

David Margree, assistant director of criminal investigation, HMRC, said: 'The sole intention of importing this wine was to rip off the honest taxpayer to line their own pockets. These men thought they would use crafty code words and complex chains to avoid detection, but HMRC was able to detect and stop this scam.

'HMRC will not stand by while criminals try to cheat the system. The message is clear - HMRC will find you, and you will go to court.'

Parma and Mori were arrested in July 2009 after a discovery of more than 114,000 litres of wine during a search. HMRC investigators realised the scale of the fraud after finding records on a company computers and on a memory stick mapping out the fraud.

A further indication of the fraud was revealed to HMRC investigators when stock levels at the UK bonded warehouse showed that wine was being stored for unusually long periods of time.

Parma and Mori skipped bail and returned to Italy, but were tracked down by Italian Police and extradited to the UK in 2012 to stand trial. During the arrest more than £58,000 of cash was seized.

Confiscation proceedings are underway.