Over three years, staff at the Gambian Diplomatic Mission ordered more than half a million 50g pouches of tobacco.
It should only have been for personal use or for the Gambian High Commission but the seven staff, who did not smoke, sold much of it - cheating the UK out of Â£4.8m in VAT and excise duty.
The seven staff were jailed for at least three years each on Wednesday.
Deputy head of the mission Yusupha Bojang, 54, was jailed for seven years.
Bojang was the ringleader and was seen as a "father figure" by the others, Judge Michael Gledhill QC said.
Southwark Crown Court heard the group, some of whom ordered tobacco worth more than their annual salaries, became so bold that the embassy in Kensington had long queues of customers.
"The fraudulent ordering was so blatant that the only conclusion one can reach is that you were sure you would not be caught," the judge said.
"The quantities of tobacco ordered meant that at times the mission must have looked like a wholesale warehouse."
The seven workers included four diplomats, but the Gambian government waived their diplomatic immunity to allow prosecution.
The judge told the diplomats: "You were each sent to London to represent your country and you were certainly expected, as diplomats, to maintain the highest possible standards of integrity and honesty.
"Second, the UK was entitled to expect that you would respect and comply with the laws of this country. You have breached that trust as well."
All seven embassy workers were earlier found guilty of conspiracy to cheat the revenue.
Bojang was jailed for seven years; first secretary Gaston Sambou, 48, was jailed for six years; finance attache Ebrima John, 38, was jailed for six years; and welfare officer Georgina Gomez, 29, jailed for five years.
Embassy workers Veerahia Ramarajaha, 54, Audrey Leeward, 49, and Hasaintu Noah, 60, were jailed for three years each. Ramarajaha was also convicted of dealing, harbouring, concealing or carrying dutiable goods.
All seven will face deportation once they have served their prison sentences - though Bojang's lawyer Dean Armstrong suggested they could face "serious consequences" if they were sent back to Gambia.
He said the government there "gives tough penalties to those who transgress".
A group of Gambian diplomats who turned an embassy into a "warehouse" selling tax-free tobacco have been jailed.