GANGMASTERS who supplied workers to farms and premises in the Vale of Evesham, south Warwickshire and north Gloucestershire have been gaoled for long terms after being convicted of a £2.7m VAT fraud.

Jarnal Singh Rai, aged 53, and his son Amarjit Singh Rai, 25, both of West Park Road, Smethwick, were convicted at Birmingham Crown Court last Friday of being associated with two companies that hired out casual labour, charging their customers VAT which was never paid to Customs and Excise.

Amardip Singh Rai, 31, of the same address, previously pleaded guilty.

The companies involved were Worldwide Employment Agency and Backup Workforce, both based in Soho Road, Handsworth.

Amardip received six years, Jarnal five years and Amarjit two years.

In early 1999 Customs became aware of an organisation using the names of the two companies supplying hundreds of workers to farms and factories.

Records submitted by the companies declared that no trading was taking place.

Customs officers discovered that large amounts of cash - up to £110,000 a week - was being withdrawn from the business account.

Large amounts of paperwork and £53,000 in cash were discovered by police, customs and immigration officers in September 1999 and all three were charged in February 2000.

The officers raided premises again in November 2000 and records showed that around £1m in VAT had not been paid since the initial investigation.

All three were charged with further offences.

His Honour Judge Stanley paid tribute to customs investigators and said: "This was a major assault on public funds and was VAT fraud on a huge scale."

Mark Powell, spokesman for Customs and Excise, said: "This was a significant attack on the VAT system.

"People who try to rip off tax payers by fraud such as this must realise they can expect lengthy sentences."