Two jailed over £2m property company swindle

Two men have been sentenced to a total of nearly eight years in prison for defrauding over 100 clients out of more than £2m.

Richard Hodgson, 66, of Upper Poppleton, York was jailed for four years, two months and Christopher Douglas, 47, of Fulford, York, was jailed three years and eight months.

Yesterday’s sentencing followed a 12-week trial which concluded in December last year when a jury at Leeds Crown Court found Hodgson guilty of participating in a fraudulent business. Christopher Douglas pleaded guilty to the same charge at an earlier hearing at Bradford Crown Court in July last year.

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The pair operated a property club called Challenor Property Developments (CPD) based in Nether Poppleton in York. The company was established in 2005 but eventually collapsed in June 2008.

CPD worked by negotiating the bulk purchase of new build properties and negotiated discounts which were then passed on to their clients.

Problems began for CPD when they started selling franchises based on this business model, promising a low-risk, high return investment and exclusive access to a particular post code area, but this was not the case.

CPD used a high pressure sales technique to sell the franchise to clients, making unrealistic claims of potential earnings and false promises that if it was not a success, they would get their money back.

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They promised training and support to run the franchise which for most clients never materialised despite fees of between £5,000 and £50,000 being paid.

Complaints began to flood in from late 2007 and by the spring of 2008, it was clear the company was descending into deep financial trouble. Despite this, they continued to sign up new franchisees, take their money and siphon off huge amounts of cash for themselves. North Yorkshire Police began an inquiry in the summer of 2008 after receiving calls from more than 200 of Challenor’s clients. The three-year investigation including statements from 130 witnesses, seizure of 33,000 paper documents and the recovery 1.5 terabytes of digital data

Detective Inspector Ian Wills, of North Yorkshire Police’s Major Fraud and Financial Investigation Unit, said: “The sheer scale and complexity of the investigation into Challenor Property Developments posed a significant challenge to North Yorkshire Police. However, I am very proud to say that the Major Fraud Team more than met this challenge, securing justice for the many victims who each lost thousands of pounds.”