Two men have been jailed after using hi-tech hidden cameras, transmitters and surveillance gadgets to tell candidates sitting the exams the right answers.
The Life in the UK test is the last step towards earning citizenship and those who pass are then entitled to apply for a British passport.
But there are fears unsuitable candidates may have earned the right to settle here thanks to a highly sophisticated scam to cheat the questions.
Participants, who did not understand English, went in to a test centre in Wimbledon library, south west London, armed with a hidden shirt buttonhole camera, microphone and earpiece.
In a scam akin to a scene in a James Bond movie, two fraudsters sat outside in BMW car packed with hi-tech equipment and a laptop and directed them to tick the right answers via the secret link.
When police first came across the pair they thought they were running a cashpoint fraud, skimming the cards of unsuspecting users.
But it emerged they were helping Chinese nationals undertake the multiple choice immigration tests in the nearby building.
Police fear the gang were earning thousands of pounds and a sophisticated network that could be spread across the UK.
In the Life in the UK test, applicants are asked a series of multiple choice questions about day to day life and traditions in the country. It is supposed to allow them to demonstrate they have a basic command of English and knowledge of the country they are hoping to settle in.
But it has been open to abuse.
Last year four men were quizzed over claims of a nationwide scam at a centre in South Yorkshire to help immigrants achieve British citizenship status.
In the latest case, Sergeant Dominic Washington, of Merton Borough police, said those behind the elaborate scam made thousands of pounds profit.
He said: "When we first arrived at the scene it was very confusing as to what exactly was going on.
"However, working with colleagues from across the borough and the Met we believe that we have uncovered an established criminal enterprise that may be in operation in other parts of the country.
"We will now be educating colleagues about this type of crime, and hopefully its raised profile and extra vigilance from police will deter others from getting involved."
Steven Lee, 36, and Rong Yang, 28, of Redhill, Surrey, were jailed for eight months at Kingston Crown court earlier this week after they were found guilty of facilitating a breach of immigration law.
Two Chinese men who took the test, Ka Hung Pang, 52, of Horsham, and En Zhuang, 38, of Deptford High Street, were sentenced to 180 hours community work for deception.
A UK Border Agency spokeswoman said: "This prosecution is proof that there is no hiding place for those that break the rules.
"Those that try to gain citizenship through fraudulent means will be denied the right to stay in the UK.
"The Home Office takes the integrity of the Life In The UK Test very seriously and has put tough measures in place to prevent cheating.
"We are currently undergoing the biggest shake-up of our immigration system for a generation, including the fingerprinting of all visa applicants, ID cards for foreign nationals and watch list checks before people enter the country.
"Rule-breakers face being removed and last year we removed a person every eight minutes."
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