Customs and Excise officers have arrested four people in connection with alleged VAT offences of more than £500,000.
Thirty officers visited seven premises in the operation yesterday.
Three men and one woman were arrested.
Officers searched the premises in Littlehampton and Chichester - one commerical and six domestic - and seized documents and records.
The arrests were made in connection with businesses supplying agricultural labour to farms in the Bognor and Chichester area.
The value of the alleged fraud is believed to be more than £500,000.
The three men were released on bail and are due to report to police stations in November.
The woman has been released pending further inquiries.
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