A MAN from Worcester is among 12 people arrested in a major customs operation to root out a multi-million pound VAT scam.

During a 25-day period in 2002, the alleged fraudsters, who have not been named, are alleged to have stolen around £25m from the public purse.

Businesses and domestic premises across the West Midlands and South-East England have been searched as customs officers nationwide continue their efforts to catch the culprits.

It is believed the fraud came from the purchase and sale of large amounts of gold bullion on which VAT was never paid.

"VAT trader fraud is not a victimless crime. It costs around £2.5bn a year, lines the pockets of criminals and robs the honest taxpayer," said Economic Secretary to the Treasury, John Healey.

"These arrests show that customs continues to demonstrate its law enforcement capability and can be a match for the serious gangsters who are now engaged in serious fiscal crime."

Details of the investigation - code-named Operation Devout - were released for the first time yesterday.

Enquiries into a suspect fraud culminated in dawn searches of business premises and homes across Worcester, London, Birmingham, Berkshire, Essex and Middlesex by more than 80 customs officers on Wednesday, November 12.

Twelve men were arrested for cheating and conspiracy to cheat the public revenue.

They have been interviewed by customs investigators and let out on bail, pending further inquiries.