"At one point this organisation sold more mobile phones in the UK than all the legal shops combined," Spain's Civil Guard said of the VAT fraud scheme.
Britain's "most wanted woman" has been arrested in Spain after more than nine years on the run, police said.
The 47-year-old suspect -- identified as Sarah Panitzke -- has been wanted since 2013 for her role in a billion-pound money laundering scheme.
Spanish police confirmed that she was arrested on Sunday while walking her dogs in the northeastern village of Santa Barbara.
Panitzke is accused of being part of a criminal gang that bought mobile phones abroad and then resold them in the UK without paying value-added tax (VAT).
Through this VAT fraud, the group allegedly made profits of more than £1 billion (€1.2 billion), according to police.
'More mobile phones than all legal shops combined'
"According to British investigators, S.P. was the person in charge of laundering the profits of the organisation through multiple companies he owned in Spain, Andorra and Dubai," Spain's Civil Guard said in a statement.
"At one point this organisation sold more mobile phones in the UK than all the legal shops combined," they said, adding that Panitzke was the only one of 16 suspects still at large.
"She was hiding in a small town in the province of Tarragona, after having changed her address on several occasions," they added.
Pantizke had disappeared in May 2013 and was subsequently sentenced in absentia to eight years in prison.
Spanish authorities said she had fled to Spain, a country where she had maintained family and academic ties "since her adolescence".
'She completely changed her appearance'
In 2015, authorities established that she was hiding in the town of Olivella near Barcelona, and her husband would only deliver her basic products at weekends "under heavy security measures".
"She hardly ever left her hiding place so as not to arouse suspicion," Spanish police said on Tuesday.
"However, during the operation that was set up to arrest her, [she] managed to detect the police presence, completely change her appearance and escape."
Police said she had later broken all family ties in Spain to avoid detection before investigators discovered she may be hiding in Santa Barbara and arrested her in a "large-scale operation".
Extradition proceedings have now begun to transfer Panitzke to the United Kingdom to serve her sentence.