POLICE investigating an alleged six-figure fraud at a North-East academy school have made three arrests.

Detectives investigating alleged serious mismanagement of funds at Glendene Arts Academy, in Easington Colliery, east Durham, swooped on houses in Darlington and Whitley Bay, North Tyneside, at about 7am today (Thursday, April 3).

In Darlington a 41-year-old man was arrested, while in Whitley Bay a 57-year-old man and his 56-year-old wife were detained; all three on conspiracy to commit fraud.

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Police also expect to make one further arrest, after they visited a house in Kenton, Newcastle, but found no-one at home.

All three people arrested were taken to Peterlee police station, where they were being held for questioning tonight.

Experts from Durham Police’s economic crime team have been investigating Glendene since at least last November, when the Education Funding Agency, an executive agency of the Department for Education, published a damning report.

It is claimed around £162,000 which should have been spent on children’s education instead went to an unnamed private company.

Cash from fundraising and donations may have been misspent, with the report concluding: “We cannot put accurate figures on the potential loss to the academy.”

Tonight, Rob Wright, chairman of Glendene, said: “We are helping the police and education authorities to unravel and understand this extremely complex case.

“Because of the investigation, we are unable to comment on the case itself.

“However, the trustees and I are keen to assure parents and the local community that we have a strong interim leadership team, excellent teaching and excellent provision for vulnerable and special children – as well as robust financial systems.”

Glendene was managed by Durham County Council until became an independent academy in September 2012.

It welcomes pupils aged two to 19 with special needs including learning difficulties, autism and visual and hearing problems.

An investigation was triggered by whistle-blowers last July, after which the chair of governors resigned. The academy principal is on sick leave.

Mr Wright, who describes himself as a whistle-blower, became chair of trustees in August and the acting academy leader, Craig Platt, and acting deputy, Vanessa Elcock, were appointed in November.