A BUSINESSMAN is facing jail for the second time after being convicted of making and possessing child pornography a decade after he was locked up for a major fraud.

George Steen, 64, from Darlington, was found guilty of downloading and keeping on his computers photographs and short video films of boys and girls being spanked.

The flamboyant law firm partner will be sentenced at Teesside Crown Court in the new year after background reports have been prepared on him by a probation worker.

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Judge Gillian Matthews, QC, granted him bail until his next appearance and ordered Steen – who has links to the Philippines and Thailand – to surrender his passport.

Submissions will be made by defence barrister, Dan Cordey, on the next occasion about what category the images fall into on the one-to-five scale of seriousness.

Prosecutor Paul Mitchell told Judge Matthews that some of them – such as one depicting a victim tied to a rack, and covered in bruises – are classed as level five.

Steen was detained at Heathrow Airport in July 2010 as he returned from Bangkok, and a “large number” of indecent images were found on his lap-top computer.

The court heard that more pictures were found on two other computers when he was arrested months later at his home in Greenbank Road by UK Border Agency officials.

Balding and bespectacled Steen described the images as “sexy” but insisted none of them showed anyone under-age, and denied a string of charges during a trial.

The jury of nine men and three women found him guilty of nine charges of making indecent images, two of possessing them and one of evading importation duty.

He was cleared of two charges of making indecent photographs of children, and the jury could not decide on a further three counts, which will be left to lie on file.

In 2003, Steen was arrested by detectives from the Serious Fraud Office who were investigating a worldwide scam which swindled £1.5m out of wealthy victims.

He fled to the Philippines mid-way through his trial at Southwark Crown Court in London but was convicted in his absence and later deported and jailed for six years.

Steen was the ringleader of the gang which defrauded businessmen from around the world by persuading them to part with large up-front "admin fees" for phantom loans.

The court heard how Darlington conman, the leader of a trio of "ruthless, cynical, greedy fraudsters", led an affluent lifestyle from the proceeds of the elaborate sting.

They snared victims in the US, Canada, Australia and New Zealand by offering unbeatable rates on multi-million pound loans.

Hundreds of applications were received for loans ranging between £500,000 and £20m for businesses including hospitals, hotels and golf courses.

The clients, whose commercial ambitions often exceeded their financial acumen, would then fly to the UK to meet the gang in luxury hotels where the bogus deals were arranged.

One of the businessmen who lost a fortune had planned to set up a string of restaurants with movie-mogul Steven Spielberg and needed the cash to open a chain of submarine-themed outlets in Australia and the Far East.