Raymond Cox, Brett Issitt and Peter Kevin Glover were all involved, in varying degrees, in a high-value “carousel fraud” which saw millions of mobile phones imported into the UK – VAT free – then sold on with the VAT added.

But the businesses that bought the phones were fake and no tax could be collected, leaving the gang to pocket the cash.

All three were convicted of conspiracy to cheat the public revenue at Liverpool Crown Court in 2007, following a five-year investigation by HM Revenue and Customs.

Cox, of Morillow Heath, Hilderstone, Staffordshire, was held to be the prime mover in the fraud. He was jailed for 12-and-a-half years.

Issitt, of Manor Close, Todmorden, was one level below Cox in the hierarchy and received 10 years’ imprisonment, while Glover, of Park Parade, Whitley Bay, Tyneside, was jailed for five years.

Lord Justice Hughes told the court that Cox lived a lavish lifestyle and had profited enormously from the conspiracy.

But lawyers for each man argued the sentences imposed were too long, because the profits were not as much as the Crown had argued for at trial.

Glover’s legal team also said his time spent on home curfew between conviction and sentence should count towards his total custodial term.

The court heard Glover, 53, was kept at home on a strict curfew before he was sentenced, because of his extremely poor health and was not even allowed to step out of his own front door.

He argued this was akin to being kept in custody.

But Lord Justice Hughes, sitting with Mr Justice Bodey and Judge Michael Pert, said the sentencing judge had been informed of this, but had decided not to adjust the sentence.

“The question for us was whether this was wrong in principle.

“It seems to us that the judge was right to decide that the onerous conditions of Glover’s bail did not put him in a position equivalent to being in prison. It is perfectly true that bail and house arrest are not conditions which individuals would chose to have, but the judge would have been entitled to say that it is distinctly different to being in prison.

“He would not have had his own things around him and he would have been subjected to a very different regime.”

He said that the judge’s decision was one which he was perfectly entitled to come to and refused Glover a reduction in his sentence.

Also refusing Issitt, 33, and Cox, 37, permission to appeal against their sentences, Lord Justice Hughes said: “In my view, the losses inflicted on the taxpayers of this country by the activities of these men were simply staggering.”