The Italian Wine Company, based on the Falcon Park Industrial Estate, dodged paying £40million in tax by selling hundreds of thousands of cases “under the counter” for cash, a court has heard.

The alleged scam is said to have lasted for five years before it was brought down by Her Majesty’s Revenue and Customs.

Sole shareholder Livio Mazzarello, 56, of Cricklewood Lane, managing director Steven Waters, 56, of Somerset, and accountant Louisa Mbadugha, 59, of Lewis Crescent in Neasden, allegedly concealed the importation of huge quantities of wine from Europe.

The deception enabled the firm to avoid paying both excise duty and VAT in the UK, it is claimed.

Prosecutor David Hughes told the Old Bailey that the total loss to HMRC was as much as £40million between June 2008 and March 2013.

He said: “This was fraudulent behaviour on a massive scale.

“The tax returns did not reflect the vast quantities of wine that were being brought into this country undeclared and then sold under the counter, with no VAT, for cash.”

Mr Hughes said the truth was discovered when the correct records of wine deliveries were found on a computer server in Italy.

While the Italian Wine company claimed only 9,997 cases of wine containing six bottles each were delivered to its warehouse in Neasden, the true number of cases delivered was 287,000.

This pattern was repeated in later years, with only 32,770 cases out of 549,652 being recorded in 2009 and 95,446 cases out of 831,521 in 2012.

Mbadugha and Waters, of Frome, Somerset, both deny two counts of fraudulent evasion of duty.

Mazzarelo denies fraudulent evasion of VAT and money laundering.

The trial continues.