AN entrepreneur whose failed business venture has led to scores of complaints from customers across the country has been arrested by police and is now subject to a criminal investigation.

The Northern Echo has learnt that Mike Smallman has been arrested by police in connection with allegations of theft, fraud and money laundering offences.

Mr Smallman was questioned by detectives from North Yorkshire Police following complaints to the force by members of the public.

The force’s investigation into Mr Smallman, who ran APM Clothing Developments, in Newton Aycliffe, County Durham, has been described as “wide-ranging” and could consider potentially hundreds of cases where people have claimed they paid for goods from the now defunct fashion firm that never arrived.

Those saying they are owed money include a criminal barrister, who works as a part-time judge.

Michelle Bayliss says she handed over £2,160 to APM after coming up with the idea of developing a new range of clothing for pregnant, professional women.

Mrs Bayliss said: “There were no alarm bells ringing at all.

“He [Mr Smallman] said he had a factory in London and the Far East and was happy to take the money.

“I had no experience of the clothing manufacturing industry and he seemed to know what he was talking about.

“I got back four drawings of how I wanted the garments to look and some fabric samples. After that I heard nothing. I tried various different e-mail addresses I had but got no response at all and the phone number was just ringing out.

“I am disappointed and annoyed at myself. I felt I had a genuinely good business idea and have been let down.”

Mr Smallman, 50, is a former director or secretary of more than two dozen dissolved companies

Since revealing in July his involvement with APM, the Echo has been inundated with complaints from people – many new business start-ups – who claim they are owed amounts ranging from several hundred pounds to five figure sums.

It can be revealed that the Manchester-born businessman is associated with two other ventures – Clean Cool Europe, which claims to have the unique patent for an anti-bacterial cool-drying fabric, and The English T-shirt Company.

Both were being run from a business park in Richmond.

In a recent e-mail message to customers Mr Smallman confirmed Clean Cool Europe was no longer trading, blaming “problems with staff, out-sourced contractors and other external influences”.

In a statement a spokeswoman for North Yorkshire Police, said: “A 50-year-old man from the Cleveland area has been arrested on suspicion of theft, fraud and money laundering. He is currently on police bail to allow for further enquiries.

“If anyone suspects they are a victim of fraud or theft please contact North Yorkshire Police on 101, select option 1 and pass their information to the force control room.”