Eight residents, including a town councillor, have pleaded not guilty to VAT and tax fraud in excess of £1m, Hull Crown Court has heard.
The court heard how the residents, who are all from the Market Rasen area, have denied fraudulently evading excise duty on hydrocarbon oils, using red diesel as fuel for HGVs, evading VAT by obtaining payment of VAT credits and failing to account to the public revenue in respect of tax levied on sales and supplies of goods and services.
They also deny failing to declare a true income from self-employment and failing to pay income tax, national insurance and corporation tax.
They each face a total of 12 charges.
The residents - including 49-year-old Market Rasen town councillor David Strachan - were charged by HM Revenue and Customs (HMRC) after a series of raids as part of an investigation into illicit fuel use and VAT fraud in Lincolnshire.
The other people are Michael Wilmot, 71, of Low Road, Market Rasen, Charles Trafford, 59, of Osgodby, Derek Blackburn, 58, of Station Road, Moortown, Tracie Morton, 49, of Toft next Newton, Michael Taylor, 37, of Waterloo Street, Market Rasen, John Raithby, 58, of Snitterby Road, Waddingham and Marion Tompkins, of Little Tows, Ludford.
Early morning raids in June 2012 saw police seize documents, computers and a van equipped with re-fuelling facilities.
Officers found dismantled equipment suspected of being used to adapt fuel tanks to use illicit red diesel - marked gas oil or a rebated fuel not to be used in road vehicles.
HMRC assistant director Peter Hollier said: “HMRC takes the illegal use of red diesel and tax fraud seriously and will not hesitate to investigate those suspected of stealing public funds.”
All eight accused are due to stand trial at Hull Crown Court on March 3 next year.
They have been given bail until this date and the case has been adjourned.