An organised crime boss who lived a “champagne lifestyle” in a stately home while perpetrating one of the largest VAT swindles in British history has been ordered to pay back the taxpayer over £26 million or face another ten years in prison.

Craig Johnson, 35, used profits from the £138 million mobile phone VAT scam to fund a life of luxury at the 17th century Meaford Hall in Staffordshire, one of the two homes seized when he jailed for 12.5 years last month.

The eight-bedroomed, £3 million home came complete with pool, gym, spa and helicopter launchpad and housed a collection of performance vehicles including a Ducati, an Aston Martin, a Ferrari and two Bentleys. Johnson had purchased two helicopters which he frequently flew around the 22 acre grounds.

Other assets seized included 10 quad bikes, a yacht, racehorses, Rolex watches and diamonds. One neighbour, Alan Tune, said: “It was like living next door to pop stars."

Yesterday Johnson was ordered by a Wolverhampton Court to hand over his stolen millions or spend another decade behind bars. The confiscation order is the largest ever in a case of VAT fraud and HM Revenue and Customs said it represented their determination to put an end to the “luxurious lifestyles” of major career criminals.

Robert Alder, Assistant Director of Criminal Investigation for HMRC, said. “Stringent and robust action will continue to break up these criminal gangs, take away their liberty as well as their illicit gains."

Johnson was one of 21 people jailed in connection with the complex £138m fraud, which involved the apparent importation and exportation of mobile phones between different EU states.

Businesses illegally claimed back VAT on imported mobile phones - taxes which they had never actually paid.

"They construct a fiction of paper movements, and (real) movements of high value goods such as mobile phones and computer chips," Euan Stewart, director of operations for HMRC's Criminal Investigations Inspectorate, said.

"The invoicing relates to hard cash and large amounts of VAT, and at some point in the carousel, somebody goes missing with the money.

"We have to put the carousel of paperwork and phones together with the money and how the money moves," he added.

Johnson’s role was to launder the ill-gotten profits by buying property, race horses and sports cars. The money to pay for them came from bank accounts held in Hong Kong. His conviction followed a six-year investigation by HMRC.

Mr Tune said Johnson was always very secretive about the source of his income.

"He never mentioned anything at all. We just knew he was a really wealthy person before he came here," he told BBC Radio.

"That showed because there were helicopters coming in. He was having helicopter lessons and he was often coming over flying those. It was lovely to see."

"He was multi-rich but unfortunately, it wasn't his money he was multi-rich with," his neighbour added.

The confiscation hearing also featured two other defendants from the 12 strong gang including Linda Wragg and Steven Lipinski. Lipinski has been ordered to pay £376,540 within nine months or face a further 3.5 years in prison. The confiscation order relating to Wragg will be heard next week.

Six other members of the gang will face confiscation hearings in the New Year.

So-called 'missing trader' or 'carousel' fraud is said to cost European taxpayers up to £170bn a year - twice the EU's annual budget.

"This is one of the largest thefts from public funds that has been brought before the courts following our investigations. It has resulted in one of the longest prison sentences and one of the largest confiscation orders ever secured,” Mr Stewart said.

The order meant vital funds would be restored to the taxpayer for investment in public services, he added.

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