Officers raided properties across the region and found the cash
Four men from the West Midlands have been jailed for a VAT fraud valued at £1.8m.
Birmingham Crown Court heard how the men, from Sutton Coldfield and Walsall, set up a fraudulent mobile phone firm with a complex web of transactions.
They then applied to claim back VAT on phones which was never paid in the first place.
Two of the men were also found guilty of laundering hundreds of thousands of pounds through Birmingham casinos.
A fifth man, from Dubai, will be sentenced on Friday.
All the men were found guilty of the charges at Birmingham Crown Court on Monday.
'Extravagant and luxurious'
The court heard how the men laundered major sums of cash from other organised criminal gangs and then passed the cash over casino tables to disguise where the banknotes - a mixture of English and Scottish notes - came from.
The money laundered included profits from drugs trafficking, counterfeiting and credit card fraud, HM Revenue and Customs (HMRC) said.
The court heard how the men then used the stolen cash to lead "extravagant and luxurious lifestyles", buying items from Bentley cars to Cartier watches with the funds.
Harvinder Singh Batth, 32, of Roman Lane, Little Aston, Staffordshire, was described by the HMRC as the "principal player" in the fraud and laundering operations.
He was sentenced to nine years in prison.
Sukhjinder Singh Shergill, 32, of Snapdragon Drive, Walsall, who was involved in the VAT fraud, was sentenced to a total of seven-and-a-half years.
Both men were disqualified from being company directors for 15 years.
Suckjit Singh Birring, 36, of Weeford Drive, Sutton Coldfield, was sentenced to two-and-a-half years in jail while Jatinder Singh Salh, 35, of Harvestfields Lane, Sutton Coldfield, was given three-and-a-half years.
The court heard how the men used stolen cash to lead "luxurious lifestyles"
The court heard how the men acted as gambler and couriers for the money laundering activities.
The fifth man, Jasbinder Singh Bedesha, 46, of Al Sheef Tower, Dubai Marina, will be sentenced on Friday.
The judge indicated he was likely to face an eight-year prison sentence for Bedesha, who was president of the phone company Anisha Brokers, named after his daughter, which was used to divert the proceeds of the VAT fraud.
In raids carried out across the West Midlands, HMRC inspectors found a total of £650,000 on the five men and in safety deposit boxes, a casino, a house and several vehicles.
Chris Harrison, deputy director of HMRC said: "The successful conclusion of this case has resulted in a number of criminals at the top of the crime ladder being sent to prison for many years."