Though the indictment reflects the rise of Russian criminal gangs, officials cautioned that these groups are often more loosely structured than the Italian Mafia. And they drew a distinction between two waves of Russian immigrants.

Those who arrived before the Soviet Union broke up, including the ones indicted today, tend be less violent and have fewer ties to criminals back home. But some of the newer immigrants are linked to the Russian Mafia in Moscow, which has become increasingly powerful in recent years as disorder has spread with the fall of Communism.

Officials declined to say what led them to set up the undercover operation, which worked out of an office in Ewing Township, N.J., until 1992, when it burned down in a suspicious fire. The people accused of setting the blaze did not know that the executives of the company were Federal agents, officials said, and may have acted to extort money from the company.

Ms. Hochberg said two of the Russian emigres who masterminded the fuel scheme, Igor Erlikh and Aaron Misulovin, set up Kings Motor Oils in 1988 and were later joined by a Greek national, Demetrios Karamanos. Together, the three set up numerous bogus companies between 1989 to 1994 that were used to further the conspiracy, which is known as a "daisy chain."

According to the indictment, there is currently a Federal tax of 20.1 cents a gallon and a state tax of 13.5 cents a gallon on diesel fuel sold for use in highway vehicles in New Jersey. The state also assesses a gross receipts tax of 4 cents per gallon.

Kings Motor Oils bought hundreds of millions of dollars of tax-free home heating oil, and then transferred it repeatedly through different fake companies until it reached another company, Petro Plus, which sold it as diesel and raked in the tax money, Ms. Hochberg said.

She said there was always one bogus company that became the "burn" company, meaning that it was supposed to bear the tax liability. But if agents of the Internal Revenue Service tried to check to make sure that the company actually paid the taxes, it would disappear.