A BUSINESSMAN has been convicted of a franchising fraud involving a York-based company which later collapsed losing investors more than £2m.
Richard Hodgson, 65 was found guilty by a jury at Leeds Crown Court yesterday at the end of a three month trial of participating in a fraudulent business carried on by a sole trader.
The court heard Hodgson and another businessman Christopher Douglas continued taking vast sums of money out of Challenor Property Developments in the months leading up to its collapse in 2008. Paul Reid prosecuting told the jury people were conned out of significant sums of money believing they were buying into a legitimate business by being sold what was for them a dream, making a great deal of money relatively quickly.
Hodgson had an important role selling “that financial dream” to the clients and boasted to would be investors of his wealthy lifestyle with expensive cars and collection of watches.
In the scheme investors and buyers were offered a chance to source properties in a particular postcode area under franchise for onward sale to Challenor’s buy to let investors. One advert said that “we are going to turn you into a money magnet” and another promised to make them millionaires but problems quickly followed and the company was inundated with complaints by unhappy franchisees wanting their money back.
Some found they had been sold franchises for areas already provided to other clients.
Hodgson of Sycamore View, Nether Poppleton, York, denied any dishonesty.
He was bailed to await sentence along with Douglas, 47 of Naburn Lane, Fulford, York who has admitted the fraud. Judge Christopher Batty warned Hodgson: “You know what this means in due course you will receive a custodial sentence.”
The judge thanked the six man six woman jury for their extended jury service at “considerable personal inconvenience” and excused them further jury service for life if they wanted.
“You have been incredible, absolutely incredible, you have nothing but my admiration and thanks for the attention you have paid to this trial.
“You have been messed around mercilessly by me, by counsel, by witnesses, by everybody and never failed to smile.”