Police are expected to file charges against more people in relation to the €10 million fraud at the VAT department, The Sunday Times has learnt.

To date, charges have been filed against six VAT department employees, five men thought to be 'go-betweens', as well as 20 businessmen. But police have now broadened their investigation - questioning a number of auditors and financial specialists.

The men behind the scam face up to 10 years in prison, though any businessmen who are convicted are likely to receive lighter sentences.

According to police sources, when the scam began, four main actors were involved - a department official, a businessman whose relative worked at the department, and two individuals who acted as middlemen.

They took advantage of clients' ignorance of the fact that it was government policy to waive fines for late payment of VAT dues, and were taking bribes for doing so.

Eventually, however, the fraud became more complex, with different department officials working to waive money that businesses owed the department.

In some cases, they would even tamper with figures in such a way that instead of being in arrears with the department, companies would end up being owed money.

The department ended up owing more than €370,000 over just two years to one company that was meant to be in debit.

The police raided the department on April 3 following three months of investigations that were triggered by a businessman who brought the fraud to the attention of Finance Minister Tonio Fenech.

Mr Fenech has said he will wait for an internal audit to be completed before deciding whether to take disciplinary action against any senior department officials who failed to detect the fraud.