Three people have been arrested in Staffordshire and Derbyshire on suspicion of trying to steal nearly £2 million through false VAT repayment claims, HM Revenue & Customs (HMRC) said.
Two men and a woman were arrested in dawn raids in both counties and are being interviewed by HMRC officers at local police stations.
An HMRC spokeswoman said the three were arrested on suspicion of attempting to steal £1.97 million through false VAT repayment claims relating to the sale of large screen electronic advertising space.
One man, aged 48, was arrested in Tamworth, while a man aged 29 and woman aged 31, were arrested in Swadlincote, Derbyshire.
Adrian Farley, assistant director of criminal investigation for HMRC, said: "Today's arrests are a result of our investigation to disrupt and prevent what is believed to be a major fraud.
"One of our key priorities is to identify the abuse of our tax systems by organised crime gangs stealing vast amounts of public money for their own gain."