SMALL firms across North Yorkshire which were conned in a multi-million pound business rates scam are to receive part of a £160,000 payout.

The compensation money comes after three company directors were jailed at the successful conclusion of the largest investigation ever undertaken by the country's trading standards service.

North Yorkshire trading standards officers spearheaded the investigation before joining forces with their counterparts in Cheshire and Lancashire following a flood of complaints.

It is estimated that about £30,000 will be paid out to conned North Yorkshire firms who gave statements to aid the investigation.

The case involved a range of business rate reduction companies known as Oldfields and Strattons, which defrauded tens of thousands of small businesses across the country.

Customers were duped into paying fees up-front in the belief that their business rates would be reduced or their money refunded.

When the investigation began, the companies had secured 83,000 business customers across the country. Oldfields' gross turnover was about £8 million in fees in two years and Strattons (Consultant Surveyors) was about £6 million per year.

At an earlier hearing at Leeds Crown Court, five men involved with the scam admitted fraudulent trading or knowingly making false statements regarding the nature of services provided.

Jason Clarke, from Manchester, was jailed for 15 months, John Stenson, also from Manchester, was given nine months and Anthony Dardis, from Birmingham, was given 6 months. Lee Hilton, from Manchester, was fined £1,000.

Costs of £116,000 were awarded against the men who agreed to pay £160,000 compensation to their victims.

An arrest warrant was issued for Peter Hilton, from Manchester, who admitted fraudulent trading at the earlier hearing but failed to attend court for sentence.

Richard Flinton, assistant head of North Yorkshire Trading Standards, said: "We are very pleased with the outcome and that we have got compensation for the businesses who contacted us and have worked with us on this prosecution.

"We think the result sends out messages to those who are minded to rip off businesses that we will be just as keen to protect local businesses as we are consumers.

"And while this was a massive investigation involving a lot of resources, we believe that it is important to undertake this kind of operation to protect businesses in the area."