THE boss of a York property firm which collapsed leaving investors across Britain thousands of pounds out of pocket has admitted fraud.

Christopher Douglas, 47, pleaded guilty at Bradford Crown Court to participating in fraudulent business at Poppleton-based Challenor Property Developments, between August 2007 and June 2008.

Douglas, formerly of Naburn Lane, Fulford but more recently of Centurion Square, off Skeldergate, was told by a judge he would be given “significant credit indeed” for entering a guilty plea when he is sentenced later.

Many investors invested, through Challenor, in buy-to-let properties, only to lose their money when the firm collapsed in 2008.

Early in the investigation, a police officer in the case said total losses could be in the region of £2 million, although no figure was given in court.

The Press exclusively revealed in June 2008 how Challenor, which operated out of Regency House at Westminster Business Park and employed more than 50 people, had shut down suddenly.

As soon as the story appeared on The Press website, the newspaper was inundated by a stream of calls and emails from scores of worried investors from across Britain, and even from as far away as Australia and Russia, who said they feared they were out of pocket by between £5,000 and £58,000.

Douglas was accused of defrauding the purchasers of franchises in Challenor by dishonestly promising they would receive a full refund if the franchises were not a success, overstating the franchises’ likelihood of success and recruiting - or permitting to be recruited- people ‘manifestly ill-suited’ to operating a franchise.

Douglas was also accused of continuing to sell franchises after it was apparent Challenor was not – or may not be – viable, and of failing to provide franchisees with training, make adequate support for them, pay commission due to them and pay them back refundable deposits upon demand.

He was further accused of appropriating money from Challenor at times and in amounts that were financially damaging to the business.

Douglas’ barrister, James Hines, indicated some allegations were admitted but others were disputed.

Three other men, Richard Hodgson, of Sycamore View, York, Peter Carbert, of Woodvale Road, Darlington, and Carl Gilfoyle, of Florida Street, London, formerly of Northallerton, all pleaded not guilty to participating in fraudulent business at Challenor and will go on trial in October, in a case expected to last about eight weeks.

In an official statement issued to some investors after the company collapsed, Douglas, a partner at Challenor, expressed regret ‘with personal heartfelt sincerity’ for its 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 launched a major investigation and several people were arrested in January 2009, during dawn raids on two York properties, and a large amount of property and documents was seized for examination during property searches involving sniffer dogs.

In November 2008, the Press reported how valuable property owned by Douglas was going under the hammer in a bid to pay back some of the money owed to creditors.