(WineSpectator) - A ring of alleged counterfeiters has been arrested for faking 20 popular brands over four years and evading $11 million in taxes.

Montréal police arrested 12 individuals—many in the wine industry—last month in what authorities are calling “one of the most [significant] tax-evasion schemes referring to alcohol contraband in Quebec.” Authorities allege that 20 different labels being sold by the First Nations Winery were actually just Italian bulk wine doctored with different flavor adulterants, and now several Canadian winemakers and other prominent industry members are behind bars. Some 23,500 gallons of wine—the equivalent of 9,900 cases—were seized in warehouses and private residences over the course of 32 raids, the culmination of a sting operation dubbed “Project Malbec.”

Police estimate that the scheme moved 150,000 cases illegally between 2010 and 2014 and cheated the province and Canada out of an estimated $11 million in tax revenues (14 million in Canadian dollars).

Among those arrested so far are: Murray Marshall, cofounder and, until 2013, CEO of producer and distributor Diamond Estates Wines & Spirits; Floyd Lahache, owner of First Nations; Luca Gaspari, winemaker at First Nations for the Tenuta Santarelli brand of Italian wines; and Zaché Audette-Hall, a winemaker for Groupe Versay in Montréal. “Other arrests are coming,” Montréal police sergeant Laurent Gingras told Wine Spectator.

“The wine was coming from Italy by boat,” explained Gingras. “Once in Canada, it was sent to a winery in Ontario and from there, certain containers of wine were apparently either lost or sent to a winery in Kahnawake, which is an Indian reserve south of Montréal.” Then, an “enologist” adulterated the wine “to give it a certain taste,” bottled it under 20 different labels, and “it was resold as greater wine than it was, in Quebec and in Ontario.”

Gingras could not comment on how Project Malbec uncovered the fraud, as the investigation is ongoing, but he provided Wine Spectatorwith a list of 26 brands seized in the raids (the charges go beyond counterfeiting and include fraud, conspiracy to commit fraud and possession of stolen goods). Some are labeled with well-known Italian DOCs like Montepulciano d’Abruzzo and Barbera d’Asti. Also on the list are three wines from the inexpensive “Fresh” line of Ontario VQA wines; such local wines receive steep tax discounts when sold around Canada.