Six men were jailed for a total of 56 years following an investigation by HMRC which focused on a rat-infested warehouse in Hackney, east London and another site in the north of the capital.
The gang made more than 1.3 million litres of vodka in an attempt to deprive the public purse of nearly £16 million in duty and VAT. They spent the money on powerful cars, luxury apartments and lavish holidays.
The operation ran 24 hours a day with the help of workers from Poland, Southwark Crown Court heard.
In north London, the gang used sophisticated equipment to produce 9.5 tonnes of counterfeit hand rolling tobacco at the rate of 100 pouches per minute, valued at £800,000 in duty.
The packaging of both the vodka and tobacco was so convincing that the public would have been duped into thinking they were buying the real thing.
HMRC investigators worked closely with European law enforcement agencies from the Netherlands, Germany, Belgium, Poland and Cyprus to bring the gang to justice. The ethanol used in the vodka factory came from Eastern Europe and the tobacco was stored in Holland before coming to the UK. Further evidence suggested the counterfeit packaging came from Cyprus.
Simon Grunwell, assistant director for HMRC Criminal Investigation, said: “HM Revenue & Customs is committed to protecting the public purse from attacks by organised crime gangs trying to steal vast amounts of money. Where we find fraud we will act without delay to bring those responsible to justice.”
Confiscation proceedings are now underway.