Four arrested in connection with Challenor Property Developments collapse

The four, who are understood by The Press to include Chris Douglas, a partner in the business, were taken into custody yesterday after their homes in Fulford and Old Earswick were raided at dawn and searched.

Police said they had been arrested on suspicion of conspiracy to defraud and money laundering, but were released on bail last night after questioning pending further inquiries.

A large amount of property and documents was seized for examination during searches of the properties and sniffer dogs from West Yorkshire Police are understood to have found cash in at least one property.

Police warned today that more arrests would be made as a long and complex investigation into the Challenor collapse continues.

North Yorkshire Police said the four arrested people were three men aged 62, 44 and 38, and a 51-year-old woman.

The Press understands that they include Mr Douglas and his wife Karen, of Naburn Lane, Fulford, and Richard Hodgson, of Old Earswick, the husband of a former partner in the business, Muriel Hodgson, who retired last April.

The Press revealed last summer how Challenor, which operated out of Regency House at Westminster Business Park, near Poppleton, had closed down suddenly, leaving investors fearing they might have lost many thousands of pounds.

Scores of worried investors from across Britain, and from as far away as Australia and Russia, subsequently contacted The Press to tell of their fears they had been left out of pocket by between £5,000 and £58,000.

Many said they had invested money with Challenor with the intention of investing mostly in buy-to-let properties, but now feared they had lost their investments.

Mr Douglas later became bankrupt and then, in an official statement issued to some investors, apologised “with personal heartfelt sincerity” for Challenor’s demise.

He said constant interest rate rises had had a direct knock-on effect to the business’s core buy-to-let model and then major buy-to-let lending institutions had withdrawn products from the market, forcing Challenor into a “position of compromise.”

Police said today that more than 180 clients had now complained to officers and there was a monetary loss in the region of £2 million.

“The business dealt in the bulk sale of ‘buy-to-let’ property in the UK and abroad,” said a spokesman.

Detective Sergeant Garry Ridler, who is playing a leading role in the inquiries, said that the four arrests would not be the last to be made. “There will be more arrests,” he said.

Struggle to pay off debts

THE Press revealed last November how the millionaire lifestyle enjoyed by Challenor’s owners was going under the hammer as they struggled to pay off their huge debts.

Chris Douglas, of Fulford, and Muriel Hodgson, of Old Earswick, who had declared themselves bankrupt owing about £2 million after Challenor crashed, were forced to put an incredible haul of luxury items up for auction in a bid to pay back some of the money owed to more than 180 creditors.

The lots included diamond-encrusted watches worth up to £30,000, exclusive jewellery – some designed by the man who made Madonna and Guy Ritchie’s wedding rings – and limited edition fountain pens. Paul Cooper, of auctioneers CJM Asset Management, said: “It is without doubt the most unusual auction we’ve staged this year.”

Telephone bidders from North America, Gibraltar, Singapore and London became involved in the auction, helping the sale to fetch about £60,000.

Police in plea to former Challenor workers

MORE than 50 former members of staff at collapsed York property club Challenor were urged today to help police as they investigate suspected fraud and money laundering.

Detective Sergeant Garry Ridler, one of the detectives leading inquiries into the Poppleton-based business, said: “We will need to speak to all former members of staff in due course. It would be better if they came forward and spoke to us now rather than wait for us to find them.”

He stressed that many ex-employees, while possibly involved in “bizarre working practices,” were not suspected of any involvement in criminal activities.

He said it was believed many had left their employment early because of their concerns about the business’s working practices, and there had been a fast staff turnover.

“We are aware of more than 50 members of staff being employed by Challenor,” he said.

“We have spoken to a number of those people, but there are many more whom we have not yet spoken to.

“It is essential that they contact us now so we can establish as full a picture as possible of what was happening at Challenor.”

He said that after a police appeal for former staff to come forward had been reported on The Press’s website yesterday, calls had started coming in.

He stressed that having now spoken to about 180 Challenor clients, officers were not at this stage seeking calls from any more.

Detective Chief Inspector Adam Harland, senior investigating officer, said “It’s a very complex and lengthy investigation. It will be at least May before the next stage of the inquiry is reached.”

He said a team of officers had been dedicated to what was one of the biggest fraud investigations in North Yorkshire for many years.

Det Sgt Ridler revealed: “There are a number of inquiries to be conducted as far away as Spain and America.”

He urged anyone with information regarding Challenor to phone 01904 669582, write to Operation Leeson, at York Police Station, Fulford Road, York, or email ChallenorPropDevelopments@northyorkshire.pnn.police.uk