Australian authorities have seized 800,000 bottles of alcohol from an alleged criminal syndicate they say has potentially defrauded the taxpayer of hundreds of millions of dollars.

Key points: Two Sydney men have been charged with offences related to defrauding the taxpayer

Two Sydney men have been charged with offences related to defrauding the taxpayer Authorities alleged at least $28 million was rorted through the scheme but the investigation is ongoing

Authorities alleged at least $28 million was rorted through the scheme but the investigation is ongoing Officials also cancelled the licence of a depot office alleged to have been involved in the fraud

About 200 Australian Border Force (ABF) and Australian Federal Police (AFP) officers raided 15 properties across Sydney and Melbourne on Wednesday, seizing luxury watches, cars and $1 million in cash along with the alcohol.

ABF Commissioner Michael Outram said the group had used a sophisticated plot to avoid paying duty on alcohol being brought into the country and to fraudulently claim duty refunds on alcohol being exported.

"[It's] incredibly rare to see a fraud on this scale," he told reporters at a press conference in Melbourne on Thursday morning.

Two Sydney men have been charged with offences related to defrauding the taxpayer and more charges are expected.

Commissioner Outram said authorities had also cancelled the licence of a depot believed to have been involved in the fraud.

Depots work under strict regulations to securely store imported goods upon which duty has not yet been paid.

Commissioner Outram said the serial numbers had been removed from many of the bottles, making it hard to determine their origin. ( ABC News: Iskhandar Razak )

The group had rorted at least $28 million through the scheme, but the total amount could rise into the "hundreds of millions" of dollars, Commissioner Outram said.

The alleged fraud would not only rob the Australian Tax Office of revenue, but undercut businesses who were correctly paying duty fees on imported and exported goods, he said.

"To people in our supply chain who are infiltrating it, who are abusing positions of trust with licences, if you're doing the wrong thing criminally, we're coming after you," he said.

He said ABF and AFP officers had been investigating the alleged fraud since July, after anomalies in duty paid or claimed through the duty drawback scheme were flagged by officials.

Officials were still investigating the origin of the alcohol involved in the scam, Commissioner Outram said. ( ABC News: Iskhandar Razak )

In some instances, the batch numbers had been removed from bottles to stop customs officials tracing their origin.

Commissioner Outram urged any alcohol retailers who had bought wholesale quantities of alcohol and discovered the batch numbers were missing to contact ABF.

"We're not going to come and seize the bottle off you, by the way — I'm not the Grinch — but we would like to know," he said.